Table of Contents
The Current State of Sustainability Funding
4 Ways to Get Funding as a Series A, Series B, or Late-Stage Sustainable Startup
Steps to Prepare and Secure Funding for Your Climate Startup
Connect with investors that align with your goals and values
Maintain open, consistent communication and a strong relationship with your investors
Why Emerald Summit is a Great Opportunity for NYC-Based Women-Led Startups in Sustainability
Though most people usually associate the terms “sustainable startups” and “climate technology” with the West Coast such as Silicon Valley, New York City also offers plenty of opportunities for female entrepreneurs and startup founders in sustainability aiming to make a positive impact on the planet.
However, many women-led climate startups that go on to make a positive environmental impact often face challenges with a lack of capital and funding. According to PitchBook, women-founded startups raised 2% of the total capital invested in VC-backed startups in 2023. NYC Economic Development Corporation says that, in 2022, women-founded startups in NYC received 19% of VC funding, while Black and Latinx founded startups in NYC each received just 2.9% of VC funding.
Finding women-led climate startups funding Ideas in NYC can be tough, but it is certainly not impossible. There are many ways to look into funding and keep growing your business as a sustainability venture.
This article will cover the current state of startup funding for sustainable initiatives, types of funding available for sustainable Series A, Series B, and late-stage startups, and what you need to raise funds successfully.
The Current State of Sustainability Funding
According to Crunchbase, the sustainability niches that saw the most traction and growth in 2023 were those related to clean energy, batteries, and carbon capture. The most active clean energy investors have continuously been funding promising startups in the sustainability space. Some well-known names in the climate investor space, such as Lowercarbon Capital, TPG Climate Fund, and Breakthrough Energy Ventures, have become very active in 2023.
As global startup funding has been in decline, Crunchbase states that VC funding has been the lowest in Q1 2024 since 2018. This indicates that the landscape for entrepreneurs looking for capital has become increasingly challenging. In these difficult times, investors are prioritizing startups that offer tangible solutions for major societal and environmental issues. Therefore, sustainable startups have a unique advantage to grow with the increasing demand for impactful investments.
Sustainable startups are predicted to see major growth with the increasing consumer preference for eco-friendly products and increasing awareness of environmental issues. Startups focusing on renewable energy, electric and autonomous vehicles, and climate tech such as carbon capture technologies are seen as growing fields. As investors are increasingly prioritizing environmental and social impact, the future for sustainable startups in 2024 seems very promising.
Women Led Climate Startups Funding Ideas in NYC: Series A, Series B, or Late-Stage
There are 4 ways to get the funding you need for your startup and continue making an impact, whether you’re a Series A, Series B, or late-stage climate startup.
1. Investor Funding
Venture capital (VC) firms provide both funding and expertise to rapidly growing startups. However, getting this type of funding is usually highly competitive and rare, with only 0.05% of applicants receiving venture capital funding.
Even though VC funding comes with big competition, it is still a valuable resource. Applying to VC firms that focus on the sustainability niche, building a strong business plan, and highlighting your product differentiation can greatly improve your chances of success. There are various niche venture capital firms focused on supporting women-led startups or climate related initiatives. For example, Backstage Capital helps fund women-led, BIPOC-led, and LGBTQ+ led companies. World Fund is a venture capital firm funding climate tech companies who are in the early to growth stages.
In addition, you should also explore other private investor options such as angel investors, accelerators, or incubators. They also offer significant funding and growth opportunities for sustainable startups. Some sustainability-focused accelerators to look into include Echoing Green and Better Ventures.
2. Crowdfunding
Crowdfunding involves raising money from a large group of people, often through online platforms, without giving up equity in the company. Fundrise, WeFunder, AngeLink, and I Fund Women are some of the crowdfunding platforms that allow startups to gain funding. To succeed with this type of funding, startups need a specific funding goal, well-defined business plan, a compelling pitch, and a solid understanding of their target audience.
Once your crowdfunding campaign is live, it is time to promote it as much as possible, whether it’s through social media marketing, email marketing, word of mouth, etc. The more people you can reach, the more likely you are to reach your funding goal. Once people start supporting your campaign, it is important to keep them updated on your crowdfunding progress. Be sure to send out regular updates and let them know how their money is being used. When you reach your funding goal, be sure to thank all of your supporters.
3. Small Business Loans
Startups can also gain capital through small business loans. The amount of money a startup can get ranges from a thousand dollars to several hundred thousand dollars, depending on the needs of the business and the lender’s criteria.
In order to qualify for a startup business loan, startups must showcase their ability to repay the loan through strong financials, a solid business plan, and an excellent credit score. To qualify for a bank loan, startups may need to provide a detailed business plan outlining their financial projections and strategies for repayment. Other requirements may include providing financial statements, tax returns, and other documents to show financial stability.
Getting a startup business loan from a bank can be a difficult process for startups, particularly those with limited credit history and poor credit scores. With some careful planning and strong financials, however, it is possible for startups to secure the funding they need to grow and become successful.
4. Small Business Grants
Another way of raising funds as a startup is to apply for small business grants. Not only are there industry-specific grants, but there are also grants specifically for diverse-led startups. Diverse-led startup grants can be based on gender, sexual orientation, race, ethnicity, or being a veteran. There are also impact-focused grants that can provide startups with capital and also increased incredibility within the impact investing community.
Some examples of small business grants include WomensNet’s Amber Grants for Women, which is a $10,000 grant for women entrepreneurs and has funded several sustainable initiatives. Cartier Women’s Initiative Award is a program that awards up to $100,000 for women-owned and women-run businesses that are focused on social, economic, and environmental impact. EmpowHER Grants is a grant program that awards up to $30,000 to women-owned businesses driving solutions for public health, equal rights, sustainability, and climate change. ClimateWorks offers grant funding for businesses that are working to end the climate crisis. Google’s Sustainable Startup Initiative helps fund and develop accepted sustainable and climate startups.
Steps to Prepare and Secure Funding for Your Climate Startup
No matter what type of funding source you use, you will need to follow many of the same steps to raise money. To improve your chances of obtaining funding whether you’re a Series A, Series B, or late-stage startup, you will need to:
1. Identify your funding needs and goals
You have to be very clear about how much funding you need and what you will use the funding for. This includes outlining specific milestones and objectives you intend to achieve with your funding.
2. Have a business plan in place for your startup
Your business plan should include your startup’s mission, vision, target market, competitive analysis, marketing strategies, and financial projections. This plan will act as a roadmap for your business and a tool to convince investors of the huge potential of your company.
3. Check the financial health of your startup
Make sure that you compile all of your financial records and documents. This includes profit and loss statements, balance sheets, and cash flow statements. Investors will analyze your startup’s financial health to assess the risk of their investment.
4. Have an effective pitch deck
A pitch deck should include your business idea, market opportunity, business model, competitive advantage, financial projections, and funding requirements. Having a compelling pitch deck greatly increases your chances of securing funding.
5. Have a successful and compelling pitch
Practice your pitch so you can be prepared to deliver it confidently. Your pitch should outline your startup’s potential, the problem you’re solving, your unique solution, and why investors should support your vision.
6. Connect with investors that align with your goals and values
You should carefully research potential investors to find those who share your vision and values. Look for investors who have previously invested in sustainable startups and women-led and women-owned businesses.
7. Pitch to potential investors
Reach out to the potential investors and schedule meetings to present your pitch. Be prepared to answer questions from investors, who may require additional information regarding your company.
8. Close the deal by negotiating terms with the investor
If an investor becomes interested in your startup, negotiate the terms of the investment with them.
9. Use the funding to grow your startup
Once you have secured funding, use it strategically to achieve your business goals. This can include expanding your startup’s product offerings or hiring new employees.
10. Maintain open, consistent communication and a strong relationship with your investors
Always keep your investors informed about your progress and any challenges you might encounter. Regularly updating and communicating helps build trust and maintain positive relationships with investors.
11. Make a repayment plan to show a commitment to financial responsibility and build trust with your investors
Now that you have secured a loan, it is time to create a repayment plan in order to showcase financial responsibility. This will help build trust with your investors and lenders.
Why Emerald Summit is a Great Opportunity for NYC-Based Women-Led Startups in Sustainability
Are you a women-led sustainability startup business based in NYC or looking to network with others in the climate tech space? This year’s upcoming Emerald Summit on September 19-20, 2024, sponsored by Wallet Max, is an excellent place to start!
Hear from our speaker alumni, which include industry leaders from Amazon Studios, Climatize, LimeRed, Soneha, and more. Network directly with inspiring female business leaders in the sustainability niche and utilize the power of community. Start building yours today by signing up now!
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