Cleantech Funding Is in Short Supply—Here’s How You Stand Out
Michael Grossman • March 24, 2025
The demand for cleantech solutions to create a more sustainable habitat for humanity has never been higher, but in the last two years funding in the private sector has been scarce due to high interest rates and U.S. election uncertainty. Meanwhile, the Trump administration is freezing billions of dollars of grants, loans, and tax credits. If that wasn’t scary enough, last week Bill Gates announced he was shutting down the policy arm of his Breakthrough Energy organization.
As global investment in climate tech faces slowdowns, startups must work harder to capture the attention of investors. With only $85 million raised by Aligned Climate Capital’s latest fund, compared to the billions that tech startups attract, it’s clear that capital for cleantech is limited and highly competitive.
So, how can your cleantech startup stand out in a crowded market? Let’s dive into the key steps to attract funding in an increasingly competitive landscape.
1. Have A Unique Story
The roughly 300 VC’s, accelerators, incubators, and angel funding groups who invest in early stage cleantech and adjacent industries in the U.S. receive dozens of Power Point pitch decks every month. What that means is you need to light up their limbic brains if you want to get past the first hurdle.
I guarantee you that when they hear “We’re solving climate change” or “Our technology is better, faster, or cheaper than what’s on the market,” an investor’s first thought is “It must be Tuesday.”
That’s not to say that mission, vision, and values aren’t important. They are, but that isn’t likely what makes your startup unique.
And to be clear, what you do isn’t what makes your story unique. Right now, hundreds of companies are trying to build better batteries, whether it’s using lithium, sodium, nickel or some other element of the Periodic Table, and all of them involve advanced chemistry and materials science that was unthinkable even ten years ago. The problem is that your audience of investors has heard essentially the same pitch for funding from all of your competitors. If interested, they will conduct their due diligence on your science and engineering, but those are the poker equivalent of table stakes. It’s not what will get the money deposited in your bank account.
Case Study:
ChargerHelp
was started by a young female entrepreneur who recognized that one of the seemingly intractable hurdles towards EV adoption isn’t about battery materials or car prices, but the unreliability of EV charging stations. Any investor who owns an EV has pulled up to a public charging station only to depart in frustration and despair because the charger was broken or offline. She created an operations and maintenance company that maximizes EV charging station uptime and staffed the company with technicians from disadvantaged communities, paying for their training.
ChargerHelp has raised $21 million, including a $17 million Series A round led by Blue Bear Capital because the CEO, Kameale Terry, told a compelling story that addressed a problem that many of her investors had personally experienced.
2. Solve A Specific Problem
In the last year, I’ve encountered a seemingly endless line of startup CEO’s who want to capture carbon, produce green hydrogen and sustainable aviation fuel, clean up PFAS, and use AI to solve all of the world’s problems. They are all smart, credentialed, and altruistic, but the few of them who will raise enough money to scale all have one thing in common: they can point to a specific problem only they can solve.
Case Study:
While I don’t love the name TLS Geothermics, even a non-techie like me understood their value proposition within seconds.
Geothermal energy could be a reliable supply of clean energy in the U.S. What’s holding the industry back is the expense of finding those sources of heat deep below the earth’s surface. TLS Geothermics pioneered AI-based predictive analytics to reduce the costs and reveal untapped sources of geothermal resources.
Because the Department of Defense has recognized the applicability of their analytics model to providing clean energy for military installations around the globe, investors won’t have to connect many dots to see returns from both privately owned utilities who don’t want to saddle ratepayers with more expensive infrastructure and from government contracts.
3. Focus on Scalability and Speed to Market
Investors want to know that your technology is not just innovative but also scalable. Aligned Climate Capital’s funding strategy prioritizes companies that can move from pilot to full-scale deployment quickly. This means startups must demonstrate how they can rapidly expand without excessive capital expenditures or long commercialization timelines.
How to Apply This:
• Develop a clear path to scale, whether through licensing, manufacturing partnerships, or modular technology solutions.
• Use case studies from successful pilot programs to show how your technology can be deployed across multiple industries or locations.
• Be transparent about your cost structure and show how your solution can be profitable at scale.
4. Target the Right Investors
Know your audience. Some funds focus on specific verticals, such as energy storage, grid modernization, or circular economy solutions. Aligned Climate Capital, for instance, directs its investments toward renewable power, electrification, and decarbonization technologies.
How to Apply This:
• Research investor portfolios to ensure your company aligns with their focus areas.
• Tailor your pitch to highlight aspects of your technology that match investor priorities.
• Build relationships with investors early—don’t wait until you need funding to start conversations.
5. Mission: Must-have
While financials and scalability are critical, investors also need to believe in the mission. Cleantech startups that successfully attract funding often do so by framing their solution as a must-have rather than a nice-to-have. Investors are more likely to fund a company that presents itself as essential to solving a pressing environmental or economic issue.
How to Apply This:
• Frame your company as solving an urgent problem, whether it’s grid stability, energy security, or emissions reduction.
• Use storytelling in your pitch to make the problem and solution relatable.
• Demonstrate momentum—whether through customer adoption, regulatory tailwinds, or industry recognition.
Case Study:
The paints, coatings, and adhesives we use in our day to day life are full of toxins, and their disposal creates even more environmental damage. Enter Lakril Technologies. Chris Nicholas and his team have invented a way to replace the petrochemicals used in these products with bio-based sugars. You don’t have to posess a PhD to recognize there will be an early adopter market for their technology from some of America’s largest companies like 3M who want to show their commitment to sustainability and understand the days of petro-based chemicals are numbered.
Final Thoughts
Cleantech funding is in short supply, but the right strategy can help your startup stand out. By proving your business model early, aligning with institutional capital, prioritizing scalability, targeting the right investors, and crafting a compelling narrative, you can increase your chances of securing the funding needed to bring your innovation to market.
With competition for capital only intensifying, cleantech companies that take a strategic approach to fundraising will be the ones that break through the noise and secure the investment they need to scale.
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