Impact VC Firm Launches Shared Future Fund To Jumpstart Climate Startups
If anything has reached a state of emergency, it’s climate change. So figured venture capitalist Craig Shapiro as he watched the orange skies of San Francisco during 2020’s raging wildfires. For that reason, earlier this year, he launched Shared Future Fund to invest $100,00 in 100 startups with solutions aimed at addressing climate change— and to do so really quickly. That is, decisions are made within 10-20 days of receiving and approving applications.
“We’re giving them enough to get them off the ground and get started,” says Shapiro, who is the founder of Collaborative Fund, a New York City-based seed and early-stage venture capital fund that finances tech startups focused on creativity and collaborative consumption.
Shapiro’s interest in sustainability was also sparked by his experiences at Collaborative investing in consumer products. The firm manages over $500 million in assets across five funds. “We started understanding how the consumer economy needs to be transformed if we’re going to meet our climate goals,” he says.
The immediate inspiration, however, was a grant-making fund created by multiple philanthropists in the early days of the pandemic to jumpstart the work of scientists focused on finding solutions. Called Fast Grants, it awarded $10,000 to $500,000 to applicants, with decisions made in under 14 days. “I thought, what a great initiative,” says Shapiro. “And it was clear to me that there’s a similar urgency around climate change.” Why not provide small infusions to startups in the form of investments, instead of grants, that could provide catalytic capital. “The first dollars are so hard. You have to convince somebody to take a bet on you,” he says.
With that in mind, Shapiro approached his investors earlier this year and they devised a platform based on the Fast Grants model, opening it up to applicants in March. The fund makes $100,000 investments on an uncapped Simple Agreement for Future Equity (SAFE) basis, with the aim of financing 100 by the end of the year. It’s invested in 20 companies so far.
While he isn’t ready to announce the names of the startups he’s investing in, Shapiro says the focus is on three areas: new material, meaning more sustainable material for consumer products ranging from apparel to cosmetics; food and agriculture, including soil health; and decarbonization, or technology helping to replace fossil fuels with renewable energy sources.
To speed up the vetting process, Shapiro teamed up with accelerators and fellowship programs focused on climate change, the better to target startups affiliated with those institutions. Eventually, he plans to open it up to more applicants and also develop a fully programmatic technology for reviewing applications. The plan is to have a new Shared Future Fund each year.
Shared Future also teamed up with several partners to provide support. The Goldhirsh Foundation, for example, is talking to companies about “how to raise non-diluted capital,” says Shapiro, while sustainable food company Sweetgreen will describe its efforts to become carbon neutral by 2027 and Baniff Advisors will help with recruiting and hiring needs.
Shared Future will also share a portion of its profits with the nonprofit World Central Kitchen to support its $1 billion Climate Disaster Fund.