¶ Sunfolding's Early Vision and Challenges
Latitude Media. tier of climate technology. When we were Walking around the field, it was like going through a history museum of solar. There were panels from the eighties that were still producing power installations.
There were all those crazy ideas, the Wild West ideas we had talked about, all out there. I know you'd walk around and some people on our team had worked on some of them and you're like hitting their heads being like, I can't believe I built that. Uh this is a really fun time just to be part of this. Be in the middle of history with solar on that site and have ours be one of all these interesting designs out there, it was a good period to be to be trying something new.
Layla Madron. In 2015, she was running a solar tracker company that she founded called Sunfolding. In the clip you just heard, Layla was describing walking around the site of the company's very first major field test of their technology. The site was a 300. three hundred kilowatt solar installation at PV Evolution Labs in Davis, California.
Someone at PV Evolution Labs who was overseeing that site at the time said, We this is the kind of thing we want to do here. We wanna show that there's new technology. If you guys can get this stuff built. We can give you panels and we already have an off-taker agreement. So this can be a fully working site. You just have to get your trackers under those panels.
So this project was a major proof point for SunFolding. Up until then, they'd only built a 10-kilowatt project that proved the technology worked. But this Davis project was the startup's first effort at proving that the technology could scale.
And we tried to do all the things that a grown-up company would do at the time, working with a real EPC, working with real manufacturers, trying to build up our processes as much as we could so we would have some sort of foundation for scaling.
But unfortunately the project didn't go as hoped.
At that scale, we were testing it at the actual product level, which was a field, as opposed to the component level, which was the individual tracker itself. And so much about the field is how things interact. And so much of the field is how things install, install installability and constructability. And um we realized that we had to do a complete redesign.
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The Davis project marked the start of Sunfolding's eight year journey to prove that its solar tracker worked in the field while securing its supply chains and also convincing bankers that the technology worked. But that journey all came to an end in 2023, when Sunfolding announced it was shutting down for good.
The solar market at that moment was booming. Hundreds of gigawatts were being installed each year. And the multi-billion dollar tracker market was flourishing alongside it. So why couldn't Sunfolding make it work?
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I'm Lara Pierpoint, and this is The Green Blueprint, a show about the architects of the clean energy economy. Already invented most of the solutions needed to decarbonize the global economy. But many of these technologies are not yet commercial, and they need to get financed and built at scale. We don't have decades to get them commercialized. We have years. This week I talked with Layla Madron, the founder and chief technology officer of Sunfolding about why the company shut down.
I think that the real issue for a lot of climate hardware hard tech founders is how to get to a point where you can sell things that will pay for your company. It's very simple.
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¶ Innovative Solar Tracker Technology Explained
Layla launched Sunfolding in 2012. By that time, she had spent years at a different startup working on a problem. Can a solar plant be built using lower cost, highly manufacturable machines?
Solar in 2008 was really wild. No one knew what solar was going to look like. And I was working at the time because of my robotic. background on the machines that move around at that time giant lenses to capture the sun.
But the company was struggling to take off, mostly because the cost of solar was too high. And after four years, Layla moved on.
So taking those learnings, I left that company and started the project that eventually became Sunfolding with the idea that how do you make the underlying machines that drive the solar plant low cost enough and manufacturable enough? That this all pencils.
Okay, so talk about what was the basic idea behind Sunfolding. What was it you created to accomplish all those objectives you laid?
out. Yeah. So the basic idea was how do you take the physics of how a solar field with high wind and all these things moving around all day long, a harsh environment, and then how do you apply high volume manufacturing to it?
In 2012, the solar tracker market was in its infancy, and the most common approach was to use a motor to turn the panels. So one panel would be mounted to a steel rod, which would connect to a motor. multiple panels would connect to a single motor.
If you have a high-volume manufacturing-based system and you're actuating on top of every post, you should be able to. drastically lower the overall amount of steel in the system. And you also should be able to drastically reduce the number of Parts in your system. So sunfolding had about three to four structural components compared to dozens of structural components that a traditional tracker would have.
Sunfolding's actuator, which is the device that actually turns the panels, moved using pneumatics, the technical term for using compressed air or gas to power a mechanical process.
So to imagine it, take a pivot point and then either side of those pivot, put an airbag, a very industrial airbag, and imagine that your solar panel's on top. And as you change the pressure on either side of those airbags, the solar panel moves. But what we figured out that made it usable for solar was that we didn't need a control system on every single one through this. Unique set of geometries, we were able to create a system where the ratio of the pressures.
Made.
Every one of those actuators point in the same direction.
Basically, Sun Folding's trackers would move based on the pressure in the airbags underneath the panels. The pressure in the airbags was controlled by a system of tubing attached to the underside of the panels. That tubing was the same stuff used for air brakes and trucks.
Then the machines just when we were in Sunfold in the first few years started to become low cost enough that it started to pencil. Because when you're following the sun, you're gonna get a lot more photons.
And you're also gonna get photons at the time of the day you really need them because that one of the problems with solar is you're really peaky in the middle of the day. But when you add trackers, you're almost flat over the course of the day. And this is a huge deal for building a new kind of grid based on solar.
¶ Navigating Market Costs and VC Funding
So this is what Sunfolding was building when they pursued the 300 kilowatt project in Davis in 2015. And as we heard Layla explain earlier, the project revealed some flaws in the technology, forcing a redesign. That would become a common theme for the next few years as the company tried to keep pace with the declining cost of soil.
So when we started in Solar, we were, we know we can get to this cost and we can get to it in a certain amount of time. And we did. And we were part of this amazing industry, the solar industry, that keeps deciding it's going to lower its costs much faster than anyone could ever predict.
So that means we would get to our car cost target and the industry would have already moved way far ahead of that. And so then you do your next iteration and you bring your costs down and the industry's moved even further down. And so in this particular industry, bringing up a new technology when it's part of a new industry was both exhilarating and infuriating because the goalposts kept changing.
Eventually, Sunfolding had to raise bigger dollars. To prove the technology, the startup used a combination of seed funding from family and friends and various government grants. But to compete in the utility scale solar market, Sunfolding needed venture capital. And that made the stakes a lot bigger, too. Before we get into the projects, let's talk for a sec about the series A, because that was a really critical milestone for you guys, right? So you
you've built, as you say, these sort of smaller sub megawatt projects. Is that essentially what you took to go out and raise your series A? And how much did you raise? And how did you think about that as being like the thing that would get you to the next step as a company?
Yeah, I would say Venture Capital was a really good match for us at that moment. Um and We had the background, uh, we had a very you know, we had six years of data behind us. We had had so many partnerships. We had so many third parties come in and help us with the technology. And we had customers. We had some really big LOIs with big customers signed. We had revenue. And I think that's
kind of the right place you want to be as a company to raise series A. And it was what we needed. There weren't other buckets of capital that were going to pay for us to deploy customer projects.
And so is the way to think about it that like so you're selling, you know, these projects to to customers, to your EPCs, but that's probably not fully covering your costs. And so as you're moving into this scaling moment, was the VC funding really to like
build up your supply chain, like actually get your get these projects off the ground in a way that like you would start to show that you were able to operate at scale. Was that the idea? Even though you weren't necessarily like making making money on a project by project.
It was everything at once. So it's it's lowering your costs. It is adding the new design features. It is growing your manufacturing and supply chain. It is vetting that manufacturing and supply chain, growing your company, building a company. All of those things we've gone from a relatively small size pre-series A two
a more modest sized company, what you'd expect post-series A company that's capable of executing. So at that point, it was, we were still getting the costs down, but it was really more about let's just execute and prove that we can execute.
¶ Growth, Strategic Pause, and VC Pressures
Um, before we get to the next big milestone. B next big milestone being step up in scale and probably step up in funding. Okay.
So let's talk about how you're gearing up for that. So now you're building projects, you're continuing to try to bring the cost down as you say, you're growing your company. So what are some of the things that are happening that are that are both challenging and exciting in that period as you're trying to think about like how to get that to that next step in scale?
It is thrilling to see these huge fields of something that you brought into the world. It is wild. You dream about it after you see it. It's just such a amazing thing. It's it's like you had all of these generated graphics of what it was gonna look like and then you see it in real life, right? It's just this wild experience to have.
Um and to realize it works is just it's an incredible moment for any kind of innovator. Um so that was really inc that was amazing and it was also amazing how many people wanted to buy the product. So we had quite quite a slew of um projects. in the works that we were executing on. Okay. And that led us to that led us to our series B. We're we are we went up in scale very successfully up leading up to our series B.
And we wanted to get to the next level. And so that was the next piece. Although you did ask me something before that I that I should address, which is we still weren't at positive margin. And so that means that effectively we're still kind of paying for each project. We are not making any money on any project. Which means that we have all this great pipeline of projects.
We have this portfolio we can use for bankability, we can use for raising money, but we aren't yet profitable. We felt that if we raised enough money to get to the next level of scale, we would unlock unlock some of the scaling reductions you get in cost, which you do get at some So we went down that road. But right when we had kind of raised our right at the like end of raising our series B, we started to notice some issues with some of our sites.
You'd been building projects at this point up to about 10 megawatts, is that right? So are you thinking of this as like each step is an order of magnitude and you're ready to go to hundreds of megawatts projects? Okay. And as you're going out to raise your series B. What were the milestones that you wanted and needed to hit before doing that? And what were the milestones your investors wanted you and needed you to hit before doing that? And were those the same things?
At the time, I think I was still a pretty naive founder, even though it was, you know, maybe eight eight eight years and I'm like, this technology works and people want to buy it, therefore someone should give me money to do it. That's important to me. Thinking. That was my thinking. So I think now if I were to do it, I would have thought through some more of the high, higher level metrics around it for sure. Uh, but it seemed like that was logical enough to make it.
We needed money, we had a product people wanted. Let's go. Let's just go. I will say though, I wonder how much our desire to get to that higher level of scale. was driven by expectations around what you need to be as a company, when you're on that pathway, when you're on that venture pathway, because so many of the conversations were around how do we become one of the top three companies in the world. They warn about how do we utilize this unique technology to
help specific communities or sectors of the market that no one else is addressing. It was just about what is the biggest total addressable market? How do we get there fastest? And that was really the quest, that was really the mantra that was in my head was how do I become that?
Well, I wonder sometimes if we instead had thought about what is the niche market where this is the most needed? And can we somehow address that in a different way than going on this journey of venture capital, is there a different pathway that that technology could have taken?
Okay, but it seems like you have, as you say, you've got some solid logic behind you right now. You're building projects, people want to buy these projects, you're ready to grow, and you've got folks who are who are investing in you through a series B. So that's really exciting. And this is about 2019, right? And this is also when, as you alluded to, you're starting to see some challenges, particularly out in the field. So can you talk about what those looked like?
Yeah, so we saw some issues with some of our sites and we realized that A lot of it had to do with possibly not having as many resources to invest in manufacturing and supply chain processes as a bigger company would have taken when launching a new product. And so we had to take a step back. uh right at the beginning of twenty twenty to pause on operations so that we could implement more best in class processes.
uh and best in class testing on top of what we were doing, because sometimes you think order of magnitude scaling that the same processes you were using. translate. But as soon as you're making that many of something, you have to go to several more levels to make sure that what you're building is what you think you're building.
¶ Pandemic's Profound Supply Chain Impacts
That feels like a heavy statement. And of course the good news is nothing else is going on early in twenty twenty that would make this.
Oh, okay. So here's how this played out in such an interesting way. We I think it was January of twenty I can't remember the exact date. I'm gonna say it was maybe January or February of twenty twenty. Where we came where I went where I came to the board and I was I said, okay.
I know this is not the best thing for a business to pause, but we have to pause. We have to have our customers be happy. We have to solve these problems so that we uh we can't scale if we're not if we're not putting out the best project.
And everyone agreed. Um we have to with integrity do do this. And so we basically said this we think this will take three to six months to get in in in place. So we're just gonna do that pause. We think we can do it. We have the series B a little bit of series B buffer to do that and we're gonna invest.
And so when you say pause just really quickly, so what you mean is that you're gonna pause in terms of manufacturing and deploying trackers at the state?
That's right. And that also means that you're gonna pause in terms of taking on customers because a cust you sign with a customer and usually you have to immediately start ordering parts. So we had to we had to pause on some of those and we definitely lost a few. We had we were on this roll, right? We were at this momentum. So we had to pause on.
But we didn't actually think it was going to be so damaging and it probably wouldn't have been, except that this little thing happened in 2020 that made things a little bit more challenging than we had expected.
After the break, Layla tells us about what started to go wrong for Sunfolding.
All sorts of strange things happened during the pandemic that really affected supply. And solar is a supply chain business. And we were one tiny part of this supply chain business. And so one thing that happens when things are that insane is that people become risk intolerant, which makes sense. So their desire to try out new technology goes down. It's not insurmountable, but it is a fact. And the other thing that was really challenging for us was there was this historic divergence.
In the cost of US Steel versus Asian steel. And usually there's a little bit of a divergence, but it's not enough to make up for the fact that you have to ship stuff across the world. So all of our stuff was most of almost every part of ours was made in the US.
And we use so much less steel that it made sense for us to be in the US. We had a much simpler part, so it made more sense to be in the US. Half of any tracker is going is steel. And if that underlying commodity is three X the cost in the US, it's going to make it hard to compete with anyone.
Can you talk a little bit just about like that that one piece of the puzzle here? I mean so like
Clearly, we're sitting here during the pandemic, crazy things start to happen. Is it like you're just kind of watching as like the price of steel ticks up slowly? Did it happen suddenly? Were you like waiting to see if it would come down again? Like, how did you think about whether this was an aberration versus like a long-term issue that that required a change in how you thought about sourcing your parts.
Well, I think an important part of whenever anything quote unquote goes wrong as a founder is you have to figure out how to work it to your advantage. With Steel, we used it to look at what what our what was what what impact was it having on all our competitors. And we could see which projects they were walking away from and which ones they were staying in. And we could start to make some assessments about what their underlying costs were and what their drivers were.
So it helped us draw some of our own new milestones based on what we knew we had to achieve. So that was the positive side. The negative side was we realized that even though we were going to keep our supply chain in the US, we also had to diversify with something outside the US just so we could compete at all for certain during this time period. So I can tell you that trying to set up international supply chain for the first time for a very complex machine during a global pandemic is not fun.
Okay, so it's a global pandemic. You've raised a series B. You are redesigning and like ensuring your quality. You're creating now a global supply chain because of some of the craziness and changes in input prices, et cetera. Um, you're continuing, presumably now, to acquire customers and kind of move things forward.
So let's talk about what was happening to the company kind of as we start emerging from COVID. What was your idea on kind of the next set of things to go do now that you're able to at least theoretically operate at this hundred megawatt scale?
Yeah. So uh the market in that kind of ensuing period from when we first were building our projects to the early, you know, twenty twenty one, twenty twenty two time frame, solar had used up a lot of the flat land that we talked about earlier. And so there started to become a lot of projects that were on undulating terrain. And we looked at that and we said, oh wait, that is one of the things we always knew we could do well.
And when we started doing testing on it, we realized we could do it phenomenally well because each of our actuators. is driven by air. Most trackers are connected with a long torque tube, long steel tube. And so all of them are connected by the super long steel tube. Which means that the ground beneath it has to be flat. And so that usually means you're either on flat land or you need to make the land flat.
And generally in solar at the time people were just uh doing the grading. And on some sites that was not a big deal and on some sites It both was, I would say, ecologically devastating as well as very, very expensive. Um, but it was happening a lot. And we saw that and realized that this value proposition we had discounted early on when solar sites were flat was suddenly something that made our technology.
unique and exceptional in terms of the value it could bring. Not just value in terms of cost.
But value in terms of preserving the land as well as saving money, um, preserving topsoil, preserving land in such a way where you know, when we you know, fifty years from now when these solar sites are retired because I don't know, we have fusion or some sort of crazy new energy, that land can get reclaimed for those communities and it is still in the the great shape it was in when we originally built the solar.
So that was a that was definitely a value prop that not only was really matching the new kind of trends in the market, but also really invigorated my passion for what we were doing. It made so much sense to do something that was both helping solar as well as extremely productive. And we we definitely got a a few projects based on that, even though after taking our pause, our six month pause, which turned I would say kind of into a two-year pause because of the pandemic, really knocking us back.
Um, and then we started ramping up again. So it was this kind of restart that happened rather slowly.
¶ The Risky Utility Scale Project Decision
Mm-hmm. And so at this point, you're starting to push into the hundred megawatt range and you decide to take on a utility scale solar project. So talk about talk about those pressures for scale and what led you to think about the utility scale project.
Yeah. So we needed to figure out how to get enough revenue so we would look big enough. To get to play at another level. If we wanted to prove that we could be one of the top tracker companies and that we could get revenues that show that we could compete with the biggest tracker, or even not the biggest, even the medium-sized tracker.
Companies. We needed to prove that we could take on these bigger projects. Because honestly, there weren't a ton of the other projects, there were probably enough for us. But there wasn't enough to convince someone that was a big enough total addressable market to be worth investing in.
Makes sense. So in in some ways there's a lot of logic to the fact that you have pressure around going this big this quickly. Um, but so that's the moment that you're in. So talk about like what it was like to contemplate a utility scale solar project now. Like what were the things you were thinking about as you were maybe making the decision on whether to pursue that project or not?
I can still remember the day we made the decision. I actually remember sitting there.
Yes.
Because I knew that that decision was going to make or break the company, personally. You know, you know how sometimes when you get food poisoning and you remember that thing you ate in the moment you know. I felt I don't I don't know that I knew that for sure, but I knew that it was going to be a big deal.
And we we had been in that undulating terrain realm, but we didn't have an undulating terrain project of that scale that was ready to go. Because one of the things about solar is the sales cycle is The building cycle is long. It could be as short as three months, but it take could take as long as two years just to get to assigned PO. Um so we had things in the works, but that was the one that was read.
And it was this big project on totally flat land where we're gonna be losing a ton of money. And we had to make the decision, is it worth it to do something that doesn't show off our value proposition that we're trying to sell on? And also shows that we can't are not making money on these projects, should we still do it? And ultimately we did decide to do it because we felt that we needed to show the revenue numbers and we needed to show growth.
Even though we weren't showing profitability or even necessarily the value that was unique to the product in doing this project.
Sure. And I imagine that like particularly utilities with their risk aversion, like breaking into that market is a whole a whole thing into itself, right? It's not like you had.
To do their utility scale projects, even though we had a lot of customers who wanted us to do other smaller scale projects because we had already done a number of them. No utility scale company wants a company that's never done a utility scale project to do their utility scale. scale project. So it's kind of a new first of a kind. It's that, it's that how do you break into this market where once you're in it, you can get more and more, you have to prove
And so there were really logical reasons behind it. But I knew that if it didn't work out, that was our last shot.
Okay, so you've made the decision. Now what? What were the next things that you all did as a company to try to try to meet that moment?
It we had hired a wonderful COO um who had what it took to kind of build this kind of thing. But interestingly enough, a lot of the supply chain had been set up before he got there. So he didn't actually have much input on how he built that supply chain. And there was a gap between kind of An older regime and the new regime coming in. So there's a lot of new stuff happening. So there were new suppliers on that project. Um there were new people working on it.
Uh overall, because we had so many processes in place, a lot of that stuff cleared itself up. Um, but we had another kind of interesting event, which was we had been using a material from DuPont that had been used in automotive for 40 or 50 years is one of the most utilized polymers in the automotive industry. And it was at the core of our product.
And throughout Sunfolding, even from the beginning when we were working with the government, they were like, don't you need two different materials so that in case something happens with the one, you'll have something to fall back on? And we said, sure, when we have enough money to do so, we'll do that. But this material is so widely used. And it's been around for 50 years. So something could happen, but we don't think that's our highest risk.
So we're going to stick with this one material for now. And what we kept testing other materials, but this material was so great. We just and we knew so much, we had so much data about it in the fields. um that it was our core material. It was in fact our only material. And
Um, there was a supply chain disruption. There was a seemingly something you would never think would affect us. There was this horrible earthquake in Turkey, just really devastating. Um, that took out some tiny component that was one of the ingredients in this polymer.
And if DuPont had still been overseeing the polymer, maybe it would have been okay. But DuPont had gotten bought in by Dow and then Dow had sold off this polymer to Selenese. And Selinese had just brand new had this polymer under their And so there was a lot of uncertainty. And ultimately it took six months. for this material to start getting made again. And any sort of
You know
Stock that they had, guess who is not top of their list? Access. Solar track. This tiny solar tracker company, even though we from like from our perspective, we bought tons of their material, not compared to the automotive industry. We can't compete with Ford.
So
For the six months that we were supposed to be deploying product at the UC Utility Scale project, instead our supply chain team was on the phone with all of our customers explaining why we were laid.
¶ Inability to Fund and Company Closure
Okay. And so you've got a couple of kind of cascading or kind of building challenges in this period, right? So you're so this is happening. You've got this massive supply chain disruption. You're calling customers, you're saying you're late, you're you're trying to ramp up into this utility scale project.
What else is going on as you're trying to really, as you're starting to see strain, like as you're trying to increase your resources and be able to meet effectively these projects that you have out there? Say more about how that all looked.
What's interesting is I feel like even though this feels like the biggest horrible thing that could happen to a company, I still think we could have recovered. If we had that same sort of argument we had when we raised our series A and series B, that moment or when we got bankability, which is this is a technology that has. Risk'cause it's new, but it has a value proposition that's worth the risk.
Our value proposition of preserving the land, I think at that point in time, wasn't accepted as being a good enough value proposition to be worth the risk of us moving forward. That is my assessment. I think that it is a good value proposition. And for me, it was what I was most it was the most passionate I'd ever been about the technology at that moment. But that doesn't mean that that translates. into monetization.
Okay, so it's twenty twenty three. You're you're building things, you're you're struggling through, you're getting through this support.
And we had multiple projects. It wasn't just the utility scale that we
utility scale project, but things start to kind of turn for the company. And there were some impracticalities around raising a series C. So that was something that was not kind of the right next step for the company. What happened and why did you decide to shut down?
We were we were trying to raise money for that whole time and we ultimately came to the conclusion that it wasn't going to happen. And our existing investors were tapped out and without someone to pass us to to take us to the next phase. There just wasn't enough cash. And it wasn't like we just needed a small amount of cash. This business was so capital intensive it had to be someone with a stomach for
these this crazy cash flows and crazy amounts of cash up front and you know these projects a hundred megawatt project is a lot of money going all over the place. And ultimately, again, I feel like we You know, we just like I think the story at the end is always the company couldn't raise money if you look thing. So that is that is ultimately the case.
You know, I think if you ask any person in the company, they'll be like, Well, if I hadn't made this mistake in two thousand sixteen, this never would have happened. Like I think everyone will have their own story around it. Um, but I think I think as a founder, as it as a as a founding team, which everyone at Sunfolding was.
um to some extent. You just do the best you can. And I would say overall, we did the best we can and then maybe 50% on top of that every single step of the way. And it just was too much to do.
How much money were you trying to raise at that stage, roughly?
Well, it depends on it depends on the year. We tried to raise a lot more in twenty tw at the beginning and then we were like, okay. That you know, the markets were starting to adjust to the fact that there hadn't been as many exits in the climate space as people were expecting. And that they weren't as high. Um, so we you know, it was in the tens of mil it was I think it maybe it was thirty. Okay, I remember.
That moment to shut down that has to have been painful. How did that feel for you? How did it feel for the team of folks you worked with?
I was really heartbroken. It was like um the the worst thing I'd ever imagine happening to this company happened. It was really sad for everyone, but the connection I had with the team for that last that last year especially, everyone was so locked in. Everyone was doing everything at all. The communication was amazing. We didn't always agree that we were communicating and people were putting in just the most heroic effort.
To have all even with like the supply chain challenges, making it all happen, just over and over again, heroic. Uh and so I was sad about the company, but I was also sad to lose this amazing team that I just loved working with and who were just some of the greatest people I've known. So that was really sad. You know, I think that it was heartbreaking, but the the day that the day after we shut down and everyone came in to get their stuff.
The amount of times people said, I'm so thankful I got to do this. Kind of made up for some of the heartbreak.
I think this is why we do this in climate, right? There are some things that need to change and hopefully will change for this to be a good business. But I feel the same way. My friends Some of them will ask me constantly, what are you doing in this climate where all this is not the past like financial glory? But this, what you just said, that's the reason I do it. I mean, all of us who are passionate, right?
You do it'cause it has to be done. Yeah.
¶ Future of Climate Tech Funding and Hope
Okay, let's talk for just a second about how we're gonna fix this and fix the climate going forward. What do you think are some of the biggest I guess like, you know, I know there's some tension points between venture capital and hardware development that you pointed out that are that are really tricky. And we've talked about some of those and just like the sheer scale of what's required monetarily to do all of this.
Let me start with maybe maybe we can kind of go through pieces of the ecosystem. Are there things that companies can do differently to manage some of those tensions, you think?
So in terms of the technology companies, I think the main mistake I see early stage founders making is that as soon as they think they're ready to raise, they start, they go out to VC. And they're not thinking about the long game when they do that. Because there's only a certain amount of money that you're going to be raised from VC that's going Before it translates into an unattainable exit. And I know these founders know how to do math. All right.
Yeah. I need them to start doing this kind of math. to realize that if you are thinking, oh, I'm gonna raise 10 million for my first round and thirty million for my next round, okay, great. Multiply those numbers by ten and that's how much you're gonna have to exit to make everybody happy. And I think we need founders who can think about how do I get money from different places, but also how do I get resources.
Places? How do I weave together things so that V Venture Capital is it's one piece of my toolkit, but it's one of 10. As hard as you work to get that VC, try to get that corporate partnership. Try to get government on your side. Work with local governments if you're using something that's going to affect them. And find your allies. That is to me the thing we all need to do is create those coalitions.
Yeah. Well, and let's talk some more about that. So I mean, what are some of the things that like the ecosystem can be doing differently? Maybe like, you know, are there things, for example, VC investors could do to to make this go better for these companies.
Interestingly, I think the VCs have really stepped up for climate. I think that you know, you may l you may listen and think, oh, it's because VC is not Not doing enough. VC to some extent is doing more than a lot of other sectors to step up and take risks. VC is good at taking risks and they've taken a lot of risks. I think that the ecosystem has to stop pushing founders toward VC immediately.
Uh, the current work I'm doing is thinking about what are all these different resources and tools you can use outside of VC. And you can buy a hundred books about how to build a company based on VC. You can go through every single accelerator, even in the climate space, and they will all be setting you up to raise V. There's not that much of how do we build a coalition? There's all how do we just graduate you to getting a pile of money so then you can go.
That's a grout growth simplification, but it it does feel like that happens. Most of the time.
So what does this mean then in terms of the other things in the coalition? So so government funding, depending on which government you're talking about, may or may not be a good source of funding.
I I want to see the including the some of the VCs, I've talked to VCs about this too, start to think about new kinds of asset classes that we can use. That's a whole nother podcast or series. Like what are these assay class? People are thinking about it. And what gets me excited is I start talking about these ideas and then
I am the the VCs are almost sometimes the first ones to step up and be like, I can't do this as a VC, but I want to help you think through like what do we do? What do we do here? Um talking to banks, they like those they'll be like, oh yeah, we need that. Tell me what you figure out. You know, so so there's a lot of everyone wants to solve it. We all see that it's a problem. We've seen the bloodshed, right? And I think just continuing to these conversations and to really look at the data.
And to figure out what the data is telling us about what work, what is working and what is not, and what as an ecosystem do we need to do to give more support to these founders so they don't have to figure it out.
on their own.
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What gives you hope about climate tech innovation despite the outcome first unfolding?
Well, okay. So when I started in solar, there was hardly any solar in the ground. And as I mentioned, it was crazy everything that was happening. And now we're here and I can't even believe how low cost solar is, how easy it is to deploy.
And, you know, the pri the cost of solar going down so much maybe is part of why sunfolding's not here, but better solar is like a winner than sunfolding, right? Uh so that's that's that's one big piece of it is just The longer you wait if you're in climate, the more changes.
And so you have these moments where it feels like hope is lost, and then you can't believe how much progress we've made. It is extraordinary. You can't get lost in the waves, you have to see the whole ocean, right? And so That is for me the long the long view is hopeful.
If I wired a hundred million dollars into Activate's bank account tomorrow at your discretion to spend, besides funding your first book deal to write about how we're gonna fix the ecosystem and fund companies in a whole new way, how would you spend that money?
I would create a program for founders who have technologies that are not a good match for VC, but which are So needed, specifically things around protection and preservation, especially in the light of fires and floods, and the types of adaptation we need to take. To protect people.
Thank you so much for doing this, Layla. I can't I really can't thank you enough for sharing all of your insights with folks. There's so much to learn from so many things that folks are doing in climate, but the way that you're arriving and how candid you're being and how willing you're being to share the full story on Sunfolding. I think there's so much that people will learn from that and obviously so much you accomplished. Uh so thank you again for showing up and for doing this.
Thank you.
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Layla Madrone is an executive in residence at Activate and the former founder and chief technology officer of Sunfolding. The Green Blueprint is produced by Latitude Media in partnership with Trellis Climate. The show is hosted by me, Lara PurePoint. Our producer is Aaron Harding. Ann Bailey is our senior editor. Sean Marquand is our technical director. Stephen Lacey is our executive editor. If you'd like to suggest
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This is the Green Blueprint, a show about the architects of the clean energy economy.