Early in the pandemic, as scientists scrambled to study COVID-19, a new program called Fast Grants changed how they could get funding for research: The application took only half an hour to fill out, and the team handing out the grants made decisions within 48 hours. In a second round of grants, the funding team made decisions within two weeks. The project, devised by an economics researcher and a bioengineer along with Stripe cofounder Patrick Collison, reimagined the slow, painful process of grant making.
That inspired a new project called Shared Future Fund, which now wants to do something similar for startups working on climate solutions. Instead of the typical process of pitching investors and waiting weeks or months for them to finish due diligence, founders can fill out an application online. Within a week, they’ll be told if they qualified; within 10 days, they’ll get $100,000, enough money to get started before looking for larger amounts of funding.
“It’s really meant for the team or the people who are in the lab, or something at that very early stage, and they’re like, ‘I kind of want to quit my job, or I kind of want to drop out of school and do this full time, but I need a little bit of money just to give me some security,’” says Craig Shapiro, founder of Collaborative Fund, the investment firm behind the project.
Collaborative Fund already invests in climate tech startups like Dandelion, a geothermal heating company, and Modern Meadow, a company making biofabricated alternatives to leather. But the fund is relatively small, and as Shapiro saw the field quickly expand—and many new graduates choosing to work on climate tech—he wanted to find a new way to support growth. He wanted to help companies launch faster by eliminating some of the hurdles that entrepreneurs face when getting funding, from creating a pitch deck to taking lengthy meetings with investors.
For the fund, it’s also an easier process to manage. “There’s no negotiation,” Shapiro says. “We’re not trying to figure out valuation. It’s almost like a grant. But if they do go on to raise more money, it converts into equity.” Partners on the project, including Sweetgreen, Goldhirsh Foundation, and Banff Advisors, will offer investors more support. (Banff Advisors, for example, a talent advisory firm, can help startups find team members to hire.)
In the first year, Shared Future Fund will support startups that are already working at climate accelerators, so the companies are already vetted. One hundred startups, working on solutions to reduce emissions in sectors like food, materials, and energy, will each receive $100,000. Next year, the funding will open up more broadly to another 100 startups. The project has already funded a handful of startups in 2022. “The feedback that we got from that first batch of companies that we funded was, ‘Oh my gosh, this was so easy,’” Shapiro says. “And, ‘I wish all of our fundraising went like this.’”