Tom Biegala, co-founder of Bison Ventures, discusses their focus on investing in frontier technology companies, particularly in the climate tech space. He talks about the evolution from clean tech to climate tech investing, profitability, gross margins impact on valuation, and the diversification of ClimateTech investments. The conversation also touches on electric marine shipping, AI in battery optimization, weather prediction applications, battery technology evolution, geopolitical impact, US energy independence, government incentives for climate tech innovations, and advice for aspiring entrepreneurs in the sector.
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Quick takeaways
Bison Ventures prioritize climate technology in their innovative science-based investment portfolio.
Investing in physical world applications can fill the gap in early-stage VC funding for frontier technology.
AI technology plays a pivotal role in driving sustainable innovations and efficiency gains in climate tech solutions.
Deep dives
Overview of Bison Ventures' Investment Focus
Bison Ventures focuses on investing in frontier technology companies that are innovative in science and technology. Particular emphasis is placed on climate technology as a significant component of their investment portfolio. Tom Bagala, the co-founder of Bison Ventures, discusses the rationale for establishing the firm, highlighting the gap in early-stage venture capital funding for frontier technology companies, especially those focusing on physical world applications. Bison Ventures aims to support impactful businesses that contribute to a healthier planet and individual well-being, with a specific focus on climate technology.
Rationale for Starting Bison Ventures
The decision to launch Bison Ventures was prompted by recognizing a lack of focus in the early-stage venture capital landscape on frontier technology companies, particularly those involved in physical world applications. While many venture capital firms primarily invest in software-focused companies, Bison Ventures saw an opportunity in backing businesses with hardware or biological components that address unique challenges. This gap, especially in the hardware sector where first-time success is crucial due to the absence of immediate updates, motivated Bison Ventures to bring a distinctive skill set to support entrepreneurs navigating the complexities of delivering physical products.
Lessons from CleanTech 1.0 and Evolution in Climate Tech
The podcast delves into the evolution of clean tech from the earlier 'clean tech 1.0' era characterized by significant venture capital investment in energy production technologies, leading to challenges such as capital-intensive ventures with low gross margins due to commodity-based products. This experience highlights the importance of scalable and financially viable solutions in the climate technology sector. Tom emphasizes the need for impactful innovations with sustainable business models that offer significant efficiency gains while addressing greenhouse gas emissions.
Impact of AI on Climate Tech and Future Applications
The conversation explores the positive impact of AI technology on climate solutions, particularly in designing materials and products with low greenhouse gas emissions. Through AI-driven innovations like better catalysts for efficient chemical processing or optimized battery materials, companies are driving advancement in sustainable technologies. The potential for AI to enhance energy efficiency, optimize design processes, and catalyze cleaner energy solutions underscores its pivotal role in shaping the future of climate tech.
Government Incentives and Emerging Climate Tech Trends
Discussion shifts to government-backed incentives, such as the 45Q regulation supporting carbon capture technologies and DOE grants for low greenhouse gas cement production. These initiatives offer crucial financial support for innovative climate solutions, encouraging sustainable business models and advancing cleaner technologies at scale. Tom emphasizes the significance of policies like 45Q in providing certainty and market fit for climate innovations, supplementing voluntary carbon markets and fostering a more sustainable future.
Future Direction of Climate Tech and Entrepreneurial Advice
The episode concludes with insights into the future direction of climate tech, emphasizing the importance of impactful solutions that drive efficiency gains and address environmental challenges. Tom highlights the potential of AI-designed materials, geologic hydrogen technologies, and geothermal energy applications as transformative trends in sustainable innovation. For aspiring entrepreneurs in the climate tech space, Tom advises focusing on solutions with substantial impact, scalability, and enduring value to navigate the complexities of building successful and sustainable climate technology ventures.
Bison Ventures invests in frontier technology companies that use innovative science and deep technology. A key pillar of their investment portfolio is climate technology.
Tom Biegala is a co-founder of Bison Ventures. Prior to starting Bison Ventures, Tom worked at Cascade Asset Management Company, the investment office that manages the assets of the Bill & Melinda Gates Foundation Trust and Gates family. He joins the show to talk about why he started Bison, the climate tech startup landscape, and much more.
This episode is hosted by Lee Atchison. Lee Atchison is a software architect, author, and thought leader on cloud computing and application modernization. His best-selling book, Architecting for Scale (O’Reilly Media), is an essential resource for technical teams looking to maintain high availability and manage risk in their cloud environments.
Lee is the host of his podcast, Modern Digital Business, an engaging and informative podcast produced for people looking to build and grow their digital business with the help of modern applications and processes developed for today’s fast-moving business environment. Listen at mdb.fm. Follow Lee at softwarearchitectureinsights.com, and see all his content at leeatchison.com.