Back to the roots of VC: deploying capital boldly and early on

A founder making textiles from agricultural waste raised a pre-seed round in 2024 on a clear promise. The money would take the technology far enough to build a pilot plant, and the pilot would earn the seed round. A year and a half later, the seed investors wanted revenue instead. The company brought in a contract manufacturer so it could sell product, shrank the pilot plant and closed its seed round a few weeks before The Drop, mostly with money from an engineering body, not an institutional investor.

Alina Klarner and Jarno van den Heuvel had called their Ripple to talk about exactly this kind of moving target. Early climate capital, they said, has drifted from conviction to consensus.

The bar moved up

Alina, of Impact Shakers Ventures, said capital has climbed the ladder in the past year. Pre-seed rounds now come with expectations of half a million in turnover and a proven product. Money has piled into hype deals, and PitchBook put average pre-seed and seed valuations in Europe at about six million in the first quarter, back at 2021 levels, when everyone agreed there was a bubble. With 90% of European exits below 100 million, a pre-seed round at 20 million pre-money does not add up. Van den Jarno said Carbonfix, with about 30 pre-seed ventures in its portfolio, now sees a funding gap at seed on top of the familiar ones at first-of-a-kind plants and growth stage. Van den Jarno also objected to defence, space and dual-use being counted as climate.

Others confirmed the drift. A participant from a venture studio said pre-seed investors, whose job was to take technology risk, now ask for pilot plans before a company has even proved its concept. A pre-seed investor said the money going into pre-seed has held steady but the number of deals has fallen to about a quarter, so rounds are inflated and start-ups lack the time to build. Another pre-seed investor said their own bar hardly matters if nobody funds the next round, and outside AI and data centres that looks unlikely. Everyone fights over the same few nuclear and geothermal deals.

Alina answered that investing only where the seed round is already in sight rules out moonshots and shrinks the universe. There is always a herd, and once "the first person on the dance floor" commits, often Impact Shakers, rounds come together. Van den Jarno said Carbonfix tries to issue the first term sheet, on founder-friendly terms, and lets the company go shopping.

usually we're talking lunatic moonshots.

A fund built for the wait

A US climate GP offered proof that bold funds can be raised. Their funds run 15 years with extensions, because the average ten-year fund takes 15 or more to close anyway and savvy LPs know it. There are three rules. A company must matter for climate, as measured by someone outside the fund. The fund leads or completes only rounds that would not happen without it. And there must be a path to other investors on a modest amount of capital and time. The second fund was far larger than the first because it holds much more money for follow-on rounds. Even the winners in this field hit crises that need a bridge or an insider round, the GP said, and without reserves a fund can back a success and not share in it.

Their LPs are old family offices now run by a second or third generation, the endowments of large foundations with a carve-out for higher risk, and newly rich Silicon Valley founders who have not yet professionalised their family offices. In Europe, someone said, LPs walk out when a fund mentions more than ten years. The GP called that a good test of alignment. Early DPI, they added, says little. Their 2018 fund, with category leaders in its portfolio, shows none. One modest exit put their 2021 fund in the top decile, because the top decile starts just above zero. Gatekeepers' checklists ask for the decile anyway.

Another participant welcomed one change. People now accept that a modular hardware product built in the tens of thousands should be funded with debt, and not underwritten as if it followed the software playbook.

Betting on the lunatic idea

Van den Jarno said Carbonfix's catalytic mandates treat each deal as an experiment that needs to happen, with no strong return incentive. An in-house climate scientist checks that a company's claims stay within physical limits, because "usually we're talking lunatic moonshots." Then comes the team and whether it can deliver. At that stage Carbonfix does not assess the business model. It underwrites technology risk, and that is all. Alina looks for founders who have beaten the odds before. Impact Shakers invests only in diverse teams, often led by people who have worked on a problem for decades. Alina cited a co-investment in a GPU-optimisation company whose founder had been told it was too early by more than 100 VCs.

The founders drew their own lessons. One, whose carbon-markets company raised easily in 2022 and then found it had raised from the wrong kind of capital, said the answer is to raise as much as possible whenever possible. The textile founder had a harder worry. The targets agreed with investors who sat out the seed round may have moved again by the next one, and that makes a roadmap very hard to draw.

This Ripple was hosted by Alina Klarner (Impact Shakers Ventures) and Jarno van den Heuvel (Carbonfix) at The Drop 2026 on 16 September.