¶ Climate Tech Needs Policy Influence
Latitude Media covering the new. The energy transition. Shomik Duda has spent his career in and out of politics, finance, and energy. He was a finance director for Barack Obama's campaign and an advisor in the Obama White. Later, he went into private equity to invest in large-scale renewables projects. And after that, he founded an early-stage venture fund for political tech startups. And while straddling those different worlds, Shomique noticed a hole in the market.
Venture capitalists with experience and technology and go-to-market in company from formation, but we didn't see very much expertise in being able to navigate government and regulatory expertise.
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In 2022, Show Meek co-founded Overture, a venture capital firm focused on clean energy, AI, and industrial technologies, industries that often intersect with government.
And whether we like to admit it to ourselves or not, the government is in the ether of everything we do in energy and resilience and industrial transformation.
And so government strategy became core to the firm's approach. Show Meek says there are two reasons a politician will engage with a company on an issue.
Um the first is if they think the company can help them. And I think we're all pretty good at that portion of it. There is some fundraising usually involved. There is some showing up and and lobbying, telling them about the jobs created. But the second reason a politician will help you is is they fear that you could hurt them.
Fear. That is not a tactic that comes easily for companies in clean energy or climate tech that are often focused on optimistic messaging. But Show Meek thinks it's a muscle that the industry needs to build. And to see it in action, he looks to the crypto industry, which has overtaken Washington.
I have multiple friends running for Congress today who have said, I actually have taken note of the fact that you cannot take on crypto because they will take you out. And I'm very interested in uh instilling a little fear. in politicians that that that say one thing and do another.
Like, for example, all of the members of Congress who signed a letter supporting the Inflation Reduction Act, but then voted to gut it anyway. Show meek thinks the crypto players would have handled it completely differently.
And if you study the crypto industry Crypto didn't just say here are the jobs that can be created. They actually went after electeds. And that takes a different edge. That takes opposition research, that takes committed funding, that takes boots on the ground, that takes negative ads, that takes super PAC.
¶ Industrial Policy Reshapes Venture Capital
And for the amount of money that this industry now generates in revenue, we are nowhere close to the influence we should have.
Shomik thinks the industry needs a little more Hutzpah, but Overture is thinking much bigger than that. The firm is investing in startups that it says are critical to the national interest, areas like minerals and mining, advanced nuclear, and industrial batteries. And that requires a much more collaborative approach to government.
So the government for the first time is not this adversary for a whole slew of these things. And they can be a source of non-dilutive capital, they can be a source of opening doors, of helping find programs in their national labs, they can find carve outs to be able to help these companies move faster. And sort of really think expansively and creatively is what's required.
I'm Lara Pierpoint, and this is The Green Blueprint, a show about the architects of the clean energy economy. We've 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 we're talking with Shomik Duda, co-founder and managing partner at Overturm, about where venture investment is headed and why climate tech companies need a government strategy.
If you're not at the table, you're on the menu. A lot of these founders who think I'm just gonna move fast and break things. I'm gonna ask for forgiveness, not for permission, they are up for some rude awakenings as it relates to a whole lot of these sectors.
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Over the last few decades, US venture capital has reflected the state of the global economy. As America sent more of its industrial capacity to China, VCs shifted away from semiconductors and hardware to software and services. And Sho Meek believes that approach is suddenly unraveling very quickly.
I think the world map is getting ripped up. You're starting to see a transformational ascendant platform technology and AI coinciding with. this bipolar hegemonic struggle for global power between China and the United States.
And if we look to other similar moments in history, the space race, the nuclear arms race, the development of semiconductors, industrial policy was closely tied to technology investments.
I think we're in entering a similar moment. And so I think a venture capitalist that can differentiate capital by providing something that is desperately needed by founders. to make their journey more valuable and more possible through smart government engagement at the state, local, and federal level can potentially differentiate capital to win more deals and also make those companies more valuable. And that's what we're trying to do at Overture.
I talked with Shomiq about how he developed this investment thesis and how it influences Overture's investments. We also talked about the firm's unique model that partners closely with a government affairs firm, Boundary Stone Partners. This was a really fun, wide-ranging interview that covered the intersection of policy and capital deployment. We started our conversation by talking about the state of play in Washington.
¶ Policy Creates Market Opportunities
So you were obviously working throughout the the White House all kinds of different places within the federal government during the Obama administration. Was there like a single moment or or event that really crystallized for you what needs to happen for startups in working with the federal government?
The passage of the Affordable Care Act is one of the proudest moments I think that President Obama would still reflect on today. Help Millions of people get health care, but it also spawned a new ecosystem. There are startups like Oscar, backed by Thrive Capital, that today would not have existed without this regulatory term. And that was a awakening for me of the one, the possibility of, you know, the government can be this grinding partisan trench warfare that is usually a game of inches.
But as the president's previously said, President Obama's previously said, sometimes a seam opens and just like in football where ground games are usually pretty boring, a tailback can get a seam and take off. And when those moments appear, I think we can probably reflect back on the Inflation Reduction Act being a moment like that. You have to put all your energy into understanding how to advance that opportunity.
Yeah. Well, and you already mentioned the IRA as being one of those. And uh we were very fortunate actually recently to have John Hickenlooper on the show. And so we're talking a whole lot about this and about what it took to pass the IRA. So for you, as you saw that happen, what were the things that most excited you that made this feel like a big watershed moment, hopefully at the scale at the scale of what the ACA felt like?
I mean, I was so far on the outside. I was just a pedestrian watching, but when I see minds like Brian Deese, who had thought about this so carefully, and the patience of the movement that had tried this. in 2009 and waited and had all of the material ready to go. It was another example of the grinding trench warfare, but being prepared when you see a seam of daylight and the ambition of the Inflation Reduction Act.
I still think the way the one big beautiful bill is drafted leaves opening for a future administration to interpret m a lot of that text positively. And I think, but for the Inflation Reduction Act. The one big beautiful bill is clearly a disappointing setback from the IRA, but would still be considered one of the most ambitious climate pieces of climate legislation but for the IRA. And so I think we have to kind of pick the pieces up and keep moving.
Um, because there's still a whole lot in the One Bank Beautiful bill that should leave investors particularly encouraged about critical minerals and metals, about the opportunities of nuclear and geothermal, um, and 45X being preserved and actually written in statute. These are encouraging sort of pieces that we can continue picking up and moving forward.
Let's shift gears slightly and talk a little bit about the Department of Energy. Obviously a big player in all of this too. And I think particularly when we talk about the IRA and the big beautiful bill, we talk a lot about tax credits, but there's obviously a lot of work that DUE does. Both, you know, in kind of convening and certain regulatory standards, but really a big piece of its job is a huge amount of grant funding.
for all kinds of things across the climate tech spectrum. So can you say a little bit about how you think about the role of DOE generally, particularly when it comes to the climate startups in your portfolio and what's changing about that these days?
I will say what has always struck me is that there is a gap in the market. It is very hard to help long dated infrastructure projects that have 30 year paybacks that are critical to the national interest. sometimes find the right matched fun duration funding in the market. And that's where the Department of Energy loan program
Stepped in.
repeatedly to help critical national technologies reach their day in the sun. The horizontal fracking as an example is a technology that took decades to bring to market. There was a very stubborn wildcatter who won't bet his entire business. on horizontal fracking. And it is today the cornerstone of energy independence. It is the thing that Republicans most treasure and Democrats rightfully most treasure about the US's ability to stabilize global markets and control its own destiny.
And the roots of horizontal fracking come from the Department of Energy. In an energy crisis in the 70s, a whole lot of RD funding was put into place to make a drill turn 90 degrees. and surprise and delight generations to come. So that is the place where the Department of Energy should continue to have a role and a place where the loan program, which sound sounds like it is actually coming back to market, which is really exciting to know, um, has a role to play.
¶ Investor Returns and Storytelling Challenges
Yeah.
I think though one of the things that definitely has happened at DOE has been the cancellation of certain contracts. And so we have seen a number of climate tech companies that are struggling as a result, particularly some of the bigger contracts.
That were originally supposed to come through the Office of Clean Energy Demonstrations. So this was really, you know, a set of dollars that were intended to do effectively what we talk about all the time on the show, which is build first of a kind energy project. Uh and now that funding has kind of disappeared. So can you talk a little bit about that? Because one of the things that constantly worries me.
is the long term damage this can do with respect to questioning how much we can trust the federal government and starting to steer everyone away from US government dollars when these are so valuable for doing some of the things that we need to need to do within the climate tech sector.
Look, this is where having a strong functioning independent court system that can hold the government and private citizens accountable to the law is incredibly important. And it's my hope that the courts will side with Um, the those who challenge this idea that the US government can have committed contracts and signed obligations and not fulfill them.
Uh, that is a cornerstone of the rule of law. And I hope that the courts can hold the government to account on those issues. In the short term, I will also step back to say, look, businesses that raise more grant dollars on average have higher failure rates. And it is equally important for companies and it kind of makes sense if you're spending calories and energy on chasing government grants rather than solving your customers.
Problems and serving the business, you are in trouble. I think globally we can kind of agree with that point. Now, there are certainly companies. that we should be building industrial policy to support and advance. This is the reason why we have lost a lot of our muscle on producing the things that we invented in this country.
And we have a long history of inventing amazing things and then failing to scale them in part because the US government has entirely stepped back from the market in a way that has not been helpful.
Let's talk for a second about investors in this moment. Can you say a little bit more about what you think venture investors in particular should be doing right now?
We're raising our second fund at the moment. And one of the things limited partners, the investors, the asset owners routinely ask is. Are you doing this just to make the world a better place? Is your is your is your North Star the impact you're gonna have, or are you actually also interested in making money? We have too many voices in business.
that are making catalytic impact arguments. And the thing I admire about what you're building, Lara, is that you are w I think we do have to do some delineation of what is a non-perf for profit exercise. And what is a for profit seeking exercise and where those two shall not meet and where those two are required to to integrate. And the fact that you are building first loss capital in being able to help
different portions of the cl of the capital stack come to work is really inspiring and important. And equally, being able to make a return only argument credibly to me is one of the most important ways to attract all the large pools of capital that are still kind of sidelined and eyeing a lot of our work suspiciously because they don't know where we fall.
And so I I think the most useful thing that a lot of the climate VCs can do is return unbelievable amounts of capital back to those limited partners to convince them that there is a market condition that is ready to scale capital today. And though we make a lot of we we talk a lot about Valley of Death, I think one of the challenges in our Valleys of Death in the series B and C funding is that we've invested in a lot of stuff and haven't told the story to help generalists understand it.
And as a result, the limited pool is not just limited by the limited number of climate venture funds, but that generalist
cannot engage because we have gotten so kind of Byzantine and down the rabbit hole on on the stuff we're investing in. And so to me, one of my takeaways is better storytelling, better market signaling, better discipline in underwriting, to be able to hand this to the gigantic pool of generalist capital that is interested in the infrastructure layer of AI and sometimes looks at our stuff and doesn't get it. And that's a pro that's our problem.
Sure. Can you say a bit more about that? I mean, is it about the complexity of the technology or the complexity of the regulatory system or the complexity of the stories around how you get to really solid lucrative exits? Or is it all of the above?
I think it's all of the above and the one I would add is Sometimes doing deals that do not pencil technoeconomically that are quote unquote the right things to do. And I think we have to in a high interest rate environment, we have to be more practical about the types of things we're tackling today. And I think one of one of my one of my critiques of our movement is that
Again, we have gotten so deep down our rabbit holes, we forget to bring everybody else with us. We forget politically. If I'd encourage everyone to check this, the David Shore was a famous data scientist. Tweeted out an axis. On one axis, it is what issues voters trust.
each party with more. And on the other axis, it is the the sort of intensity of importance of those issues. If you go look at that now, climate is not even in the top 10. It doesn't even rank in the top 15. There is no intensity of belief. And so I think in the context of this, and I I I bring all this up because like the stuff we're investing in, if we're steep out of the money. And we are investing in super capital intensive projects that will take twenty five to thirty years to pay back.
It it is very difficult to understand how to attract the right kinds of investors that can continue carrying that forward.
¶ Adapting Climate Messaging for DC
I I think it's a an important conversation. And to add one more story to the table here, I think this will probably resonate with you. When I left my job at the Department of Energy in the Obama administration and went to go work for Axelon, my very first day on the job, my boss sat me down and he raised an eyebrow and he was basically like
I'm skeptical of you, Laura, because you're coming from this bleeding heart, you know, place where you got to take the welfare of the American people as your goal. And here we are now in a company and I've got shareholders. Are you gonna be able to get on board with doing things that will make the company money? And my response to him was
There's not a conflict here because if we constantly work on things that are never gonna make anyone money and climate, there's no scaling to be had. And points on the board happen when you scale. And so we really, I think, have to continue to be clear with ourselves as an ecosystem, you cannot compromise on either one of these things. You have to be impact focused and you have to be very business focused. And so
To your point, what we're building at Trellis, yes, we're using philanthropy. We're trying to figure out where we can solve gaps in the ecosystem. And we have an extensive diligence process around understanding is this going to be a successful technology from a market perspective? Because it has to be, otherwise you never get the impact. So anyway, again, very aligned with you on all of this.
Okay, so let's talk for a second about the climate tech companies that are out there in your portfolio that are trying to figure out how to navigate the current environment. I remember in sort of previous changes of administration and changes of party, we go back and forth within the climate sector. You know, when it's a democratic administration, you talk about climate, you talk about justice.
When it's a Republican administration, you talk about energy and you talk about security. Is it that simple today? Or is there a different message that startups need to be holding in their conversations in DC?
You know, my co founder Brandon sometimes jokes that it is the same language in a different dialect. And I think that's I I've seen some of our best companies. fluidly be able to make the same arguments that had the same outcomes in the Biden administration with the Trump administration. And I think the sort of big bipartisan consensus is that we need to build
Again, in this country at scale. And we need to rebuild our supply chains and have control over them. We need to be able to provide ourselves with. our own sources of energy. We need to be able to provide ourselves with our own um critical minerals and metals that fuel these supply chains. We have to learn how to remanufacture and reindustrialize in ways that we have kind of forgotten.
¶ Company Examples of Policy Engagement
And so our some of our best companies like Antora today um have built their first of a kind project in the backyard of the Senate Majority Leaders district. We have a mid duty EV truck startup called Harbinger. That is building from the Panasonic Cell up a fully fully vertically integrated powertrain and strip chassis for the class four to six delivery truck.
These are the trucks from Amazon, UPS, FedEx, EC idling outside all of our homes, dropping off shit we don't need. Those trucks, no one's built an electric alternative and 70% of them go 70 miles or less per day. And Harbinger by next year will be at cost parity with ice trucks without any tax credit.
You know, they have 150,000 square feet of manufacturing facility, they are in motion, they are making eight trucks a day, they have positive contribution margins, they've had to adjust in interesting ways. You know, they lost. a lot of the tax credits that were gonna that that that would have made their trucks cheaper. And instead of bemoaning and trying to sort of pearl clutch over that, they actually just guaranteed the same price to dealers.
And dealers kept buying. And so I've seen companies adjust fluidly. Crux in our portfolio, which is the clean energy marketplace for um uh a fintech kind of marketplace for clean energy. They were deeply worried about tax transferability going away. And again, rather than watching this show from the sidelines, Crux dove in and shaped outcomes. And Boundary Stone, I'm really proud to say, helped Crux with that outcome. And lo and behold, tax transferability is largely safe today.
So I do think it is really important to understand how to engage in the government and realize that this is not something that happens to you. You also have agency to influence it. And it though their time scales are different and we often think in quarters and the government can think in election cycles, there is an opportunity, there are these opportunities to really exert yourself on the system and not just hope for the best.
And I think throughout our portfolio, we see companies and founders that that have sort of taken that agency on. And that's been a really fun education process to be able to help them with.
Can you say a bit about when you deploy that kind of strategy and what it looks like when you do?
The first thing I do is always defer to Boundary Stone because they actually are super drilled down, seasoned experts. They live and breed this stuff on Capitol Hill. Um, and there are moments to engage and there are moments to back off. But the things I've had to sort of generalize, a couple of things I've noticed. First is working in associations with other companies is incredibly valuable.
We're so used to viewing competition warily. But when it comes to th like the thermal batteries and they're all the all of the thermal battery companies can actually bind together and actually help influence 45X. which is what Boundary Stone helped and Tor and countless other companies go do in ways that helped it's not just one CEO saying, here's my company and here are my interests. Often the government will view that with some wariness.
¶ Mastering Government Engagement Tactics
But when it's 50 companies that are coming together saying, here's thousands of employees that get to benefit and here's customers that get to benefit, that really helps. Um, that that's one. Two is Sometimes there are in in entrepreneurship, there's a discrete outcome you want to drive to. And at the end of this meeting, here's what I want to have done.
And in government, sometimes, as you know, there's 15 meetings before anything gets done. And it is the rep of being able to stay top of mind, of being patient, of building relationships. and learning to change your vernacular a little bit. That is takes a lot of patience and time. And in the same way that we tell our CEOs, 20% of your time should probably be devoted to fundraising, whether you're raising or not.
You should be having conversations with growth investors, keeping them oppressed. When you raise your next round, it's really easy. In that same way, some percentage of every founder's time should be devoted towards government. And whether there's a discrete outcome they can underline and say, here was my KPI and I hit it. It's not gonna happen that way, but it is still a worthwhile investment of time. And that can sometimes be a real eye opening.
for a lot of these founders. I think interestingly the crypto community is one for us to study a bit in that way. When you listen to, you know, Brian Armstrong talk about this at Coinbase, he came from Silicon Valley and was not used to building this muscle. And Coinbase built a formidable government presence and it shaped outcomes and it took buy-in from the top for him to be for that company to be able to listen.
do that. Right. Yeah. I think this is really critical. And I love how this connects to what you were saying earlier that I think for founders, you may be thinking to yourself, well, I'll go to DC when I need something. Like when that becomes critical for the growth of my company, then sure I'll show up. But to your point, that's not how policy works. Policy changes when there are these open windows and you don't know when they're going to pop up.
And so the retail work of making sure that you're on a senator's mind, that they're thinking about your company and your needs, that they're thinking about your perspective. on the ecosystem when they have that moment of opportunity to make some kind of change. It's so critical and very cool that you all help facilitate that.
One of the things that struck me about what you were just saying is that the crypto industry by its nature is a financial industry and there's huge amounts of money in all these transactions and just insane amounts of money that are naturally part of the story. So my guess, and I would love to check this with you, is that it's a little bit easier in their case to make the case to, you know, would-be politicians.
that they can bury them if they want to, just given the amount of money flowing around. What do you think very specifically it's going to take on the climate side to create some sort of similarly heavy? I don't know, potential stick, I guess, for the folks who are ultimately running for office.
You know, I think it j it does come down to dollars and it does come down to energy and commitment. And you were right that when you have Crypto assets appreciating it a million percent. You know, it's easier to put some portion of those dollars. But I think if you think of a percentage of your profits that are being devoted to government efforts, and if you look at the percentage of profits.
that the oil and gas industry puts into government lobbying versus the percentage of our profits, not on an absolute dollars basis. We are still one one hundredth of where the oil and gas industry is. And so I would just start there. And even if that's less total dollars, there could still be far more influence than we are having today in that respect. And the second is
Finding and recruiting top-tier political operatives who can run campaigns on this. And I think that is the other portion. If you look at the kinds of minds the crypto industry attracted, Chris Lahaine, who was a feared kind of ballot political strategists in California, let Airbnb for a while, let a bunch of crypto efforts. I think minds like that, it's high time for us to go kind of recruit and point dangerous people like that towards campaigns we want them to run on.
And I think, you know, so it that is also a matter of dollars. Um, but those dollars are gettable. I just don't think that we have enough muscle there.
¶ Shifting Politics and Persuasive Narratives
And building that muscle means figuring out how to interface with an increasingly partisan Washington, DC. More on that after the break. Okay, so let's talk about partisanship for a second. One of the things that I also viscerally remember from my time in Washington, DC working on climate is that the funny thing about is really energy in particular, at least in those days, which is to say longer ago than I would care to admit.
Is that it wasn't so much partisan as regional. And it was really interesting to see how, you know, members of Congress in particular. were representing the interests of their state. And so if there was a lot of oil and gas in their state, it didn't really matter if they were a Democrat or Republican, they were gonna represent oil and gas in interests. The same thing was true if like you've got the timber industry in your state or if you've got a lot of solar production, whatever it is.
Uh, but I'm starting to get the sense that things have changed. And so do you agree with that that there really is more partisanship that you have to take into account as you're thinking about how to interface with Washington DC? And going back to, you know, kind of the question I asked earlier. What is what does that mean then about the language that startups should be using when they do show up?
It does feel like we're nationalizing everything. And Martin Heinrich is an interesting example here. Senator Martin Heinrich from New Mexico, which is a large oil and gas state, but he has been fearless on a lot of climate issues. He's the vice chair of the Energy and Environment Committee in the Senate and and he has been really outspoken on climate issues. And it does feel like we now have these litmus tests to pass through party primaries and especially closed primaries.
are a problem in creating um making it more difficult for sort of center left and center right candidates to emerge, in addition to the kind of like online um radicalization kind of uh uh trend that that we mentioned earlier. Uh and I should actually put in a plug. There's a there's a thinker on the internet named Tristan Harris, who I think is first class about thinking about the ways in which social media is impacting the ways we think.
And he warned about this 10 years ago. And it is interesting, increasingly, I'm starting to, this is a total aside and does not actually answer your question, but I think it's interesting to think about. I don't know if you've picked up on this, but we're starting to everyone's trying to think in images.
You know, we had US troops deployed on the streets of Washington, DC, and a DOJ employee threw a sandwich at them in outrage. And that sandwich throwing image is the thing that most people took away from the fact that we've US troops that have been deployed into in into a domestic city. And I I think that's very interesting that like the mediums in which we absorb information are the message and our brains are starting to be attuned in that way. And so I I as it relates to how
companies now approach the government. I do think there is a world of storytelling that founders and companies need to do that is social media first. And lose the muscle of, oh, maybe I'll place a story in Fast Company and Fast Company will tell my story and then I can retweet fast company. That's not actually the way our brains work anymore. We are starting to think in videos. We are starting to think in images. And so I think founders need to all learn to be their own spokesman.
people, spokespersons, and need to be able to use videos and use images to get capture attention and then use that attention to push their issue forward. And so, you know, there is nobody better that was better than this than Elon Musk, obviously. He was his own spokesperson for Tesla. And um, as as disappointing as he may have been in the last couple of years.
It is impressive that he was able to do that. And he sort of saw this before him as obvious. And so I think I one of the things I try to coach our CEOs on is don't think that you'll place a story in fast company and you're done.
You need to be your own spokesperson and constantly learn how to we're in an attention economy, grab attention because then when you meet with an elected, that elected may be interested in your workforce phase, but also interested in your attention, that you're in the attention economy and they need to win that attention.
And so I think as it relates to lobbying and language, what might be more important than what you say in the meeting is the air cover you show up with before you even show up. And that's something that founders do have some agency in building and getting reps at. Does that make sense? I don't even know. That's a the theory of mine. I don't know if it's true or not.
No, I actually love that this is where this discussion is going. What's so interesting is that in my conversation with Senator Hickenlooper, we wound up having discussion about campaign finance reform, right? Because at the end of the day, it's like all of these
realities about the dynamics on how things work in Washington T E C can be traced back to these bigger social causes. And so that's, you know, really the thing that we wound up discussing. And it seems like you're you're taking us there too, down to this root root cause.
piece of the puzzle that really is how we communicate with one each with one another and to your point, how we now think. So I think this is really fascinating. I mean, do you think that This relates to what we were discussing before, that it's not that we need not just to be able to tell the good news stories about climate, but honestly to have some ways to, for lack of a better way of saying this, I guess punish, you know, policymakers who turn their back on climate.
Is this part of it, being able to garner more of the attention economy more effectively as a way to help steer politicians in the directions that they, you know, agree to when it comes to their climate commitments?
I think so. I also think there are times where we can hide in plain sight. You know, what one of the most interesting things I learned is that uh recently is that apparently there are two sounds that are uniquely damaging to the human ear. One of them is A golf club hitting a golf ball later on is actually like not very good for your ear. The other is a diesel leaf blower.
It operates at a decibel level that is just so fing annoying and is so harmful to the human ear that it prompted a whole lot of municipalities to ban diesel leaf blowers. And not once did emissions come up. It's just an annoying sound. And guess what? There's a whisper quiet electric version of this that's less annoying and less harmful to the human ear.
And so where there are times to have some expansive argument and learn to get out of our own way and not make an emissions argument that bums people out, but instead make an argument about why this is just better is I think a discipline we need to get used to used to. Um, and so learning to kind of bide our time and hide in plain sight, make expansive different arguments, go in different directions, I think that's also very useful.
¶ Strategic Messaging and Timing
Yeah, let's all let three chairs for practicality on this. Well, I think you're starting to anticipate another question that I have about this, which is that I think part of what you're saying here is yes, get out there, tell your story, tell your story in ways that are actually resonating with the American public and frankly with policymakers right now, which includes
lots of social media. It includes videos, includes images, the things that stay with people in this attention economy. But when you're advising companies, say particularly the ones in your own portfolio,
When is that your advice versus when is your advice, hmm, lay low? Maybe don't say anything, stay under the radar. You know, does it depend on the particular technology you're pushing for? Does it depend on the timing? Like how do you think about making that decision? When to be outspoken and when to not be?
I think it depends if there's something super critical to your business or not. If there's something that is marginally useful, but the timing is wrong because of the conditions in DC, the dialogue in DC, whatever else, sometimes there are just more important things going on in the government than your one thing.
And understanding where you are in that timing and whether this is marginal to you or essential. If there is something essential that is life or death for the company, then you gotta get it, you gotta figure out a strategy and you gotta go to work. You can't just hope for the best.
So I think it is some of that. And again, there is no better calibrator of that than my friends James Prussing, Sidney Bop, Jeff Naven, and my co-founder Brandon Robot, all at Boundary Stone. Those are the people I really defer to on these topics.
It's also worth noting that there's a whole lot going on in states. So I have a new um operating partner who is the head of Axiom Advisors, which is the best government affairs and lobbying firm in the state of California. We have a governor there who is starting to really wake up. And probably make a case for a national campaign in the next couple of years. So being able to help tap the third largest economy in the world.
who is gonna have a$30 billion climate budget is also useful to know what's going on in states. And so even if your argument is falling on deaf ears at the federal layer level, knowing how to go into states and make arguments and survive, right? Our first mission to startups is
Don't run out of cash. And rule number two is see rule number one. So stay alive. Right. And so like be creative in how you stay alive and uh go to states, go, go to places that where you're gonna have a warmer reception uh and do what you need to there.
Right. I mean, that makes a lot of sense. Uh so in terms of, you know, go going back to this idea that It used to be regional. Now things are a little bit more partisan. I also feel like we're seeing more and more these days a little bit more differentiation by technology, frankly, or by approach and with respect to what the strategy is likely to be.
Do you think that, you know, again, going back to some of these questions around like how outspoken should you be? How much should you spend time trying to leverage potential DOE dollars?
Do
Are the are the strategies there are as simple as, okay, for example, if you're solar and wind, you're on the outs right now, you've got to lay low, you're a nuclear technology, go full steam ahead because you've got a super supportive administration.
Or is it more nuanced than that? Like do you do you find yourself sort of saying the same things over and over to the same kind of technology areas within your portfolio? Or is it really is it really about timing and a whole other host of of decisions that you need to think about?
I think generally, you know, just as a matter of like language, I've heard anecdotally the words clean, sustainable climate are automatic kind of triggers. for negative response. But American independence, kind of domestic resilience, um, com competitiveness, ris you know, strengthening the grid, helping make
um our our systems stronger to be able to, you know, sustain more production. These are things that land much better. And so again, like I think avoiding the obvious triggers in language and pointing to the ways where this is helping advance. some kind of national interest as it relates to a more resilient grid, as it relates to the ability to sustain more electrons to the things we care about. Those are I I've heard anecdotally are landing well. But again, like if you are building
a utility scale solar plant, this administration is openly hostile to that idea, which is mind boggling to me. And yet it is clear that that's a place for a little more defense until we have a friendlier Congress at a minimum.
¶ Rebuilding Critical Nuclear Supply Chains
Okay, are there any visceral stories you can tell? Any moments in time when you're Somewhere in Washington DC, you're trying to convince a policymaker or something of something, or you're working with a startup and trying to train them up to talk to someone. Anything you can think of that's like a This was a big deal moment and something changed as a result of our interactions.
No, we're investors in an advanced nuclear fuels company called Hexium. And Hexium is a platform that can produce Halo, which I mentioned before, we are at kilogram scale it today. It can also produce Lithium-6 and lithium-7 isotopes, lithium-6 isotopes are critical precursors for a lot of fusion blankets in reactors. And we have to reinvent both of those supply chains. I didn't fully appreciate this, but
We in the 90s, we voluntarily kind of stopped a lot of our commercial enrichment processes in the United States to declare the end of history. And we said, Russia, you're going to be a democracy and you can produce this and we'll trade and this will be amazing as part of our nonproliferation efforts. to open Russia to the rest of the world. And lo and behold, today, you know, we have very little domestic supply chain in in Halo today. And we're gonna require a two thousand X scale up in a hurry.
Similarly, the lithium-six isotopes had such a dirty process to it. It's such has such a heavy mercury contamination risk, the EPA banned it in the seventies. The three countries that dominate lithium six supply are Russia, North Korea, and China. And so this company, Hexium, is spinning an Avalus technology out of Lawrence Livermore National Labs, which was well understood to be a very efficient pathway to be able to produce these critical precursor fuels.
And they need they wanted help. And so Boundary Stone and Jeff Naven in particular has helped stitch Hexium together with a lot of these entities in ways that are helping this company have more commercial momentum as they go into their Series A. And so those are moments of like, oh my gosh, there's so much for us to do to help.
in both storytelling and agency introductions with reactor companies that Boundary Stone is already assisting. And so it's a place of enormous pride for me that we can be a not just a government expert on the cab table. We can also be a business development partner to a lot of these companies.
And just to help with the DC alphabet soup. So AVLI is advanced laser isotope separation, right? So this is one way of getting to the very specific isotopes that you need in a nuclear context. And then we've also been using HALU, which is High assay low enriched uranium, which is effectively sort of a different, slightly higher enriched version of the same sort of nuclear fuel that we're using today.
One of us is a nuclear engineer. The other is an economics kid from Williams College.
You're doing great. You were you're clearly well versed in the technologies in your portfolio, which is so awesome.
¶ Global Climate Tech and US Resilience
Okay, so one more question about the global context for all of this. One of the things that we're seeing right now within Trellis is that a lot of the companies that we've been tracking and speaking to and working with over the last couple of years around how they're going to cross the scaling and commercialization gap.
Uh they've noted what's happening in the United States right now. And many of them are starting to think global thoughts in a way that I think is different from what I've seen in the climate tech community. Are you seeing the same thing within your portfolio? Are you thinking about
sort of how how to parse a US government strategy as companies are starting to look into other countries? Are you looking at supporting them along those journeys? Are you bringing in folks who can do international negotiations? What's your observation on the on the shift here?
You know, I think again, it depends on the technology. I think the largest, most sophisticated technology companies in the history of the world. that have built money printing machines are all singularly focused on clean firm power. for their data centers. It is the top ranking single most important issue for them. If we can't figure out how to make money against that thematic, I should not have a job. And so that is largely in the United States. It'll also build data centers around the world.
You know, some of these other technologies, especially anyone producing kind of clean commodities, if you need lots of capex to produce a facility that's producing a commodity stream that is indistinguishable from the fossil fuel cousin, but is much more expensive and maybe a longer payback. Those may rightfully need to go to Europe. Um, but still like the US, you know, this is a this president has a couple years left and we are a 10 year fund.
We will have many presidents that come and go. There are some issues that I think are enduring problems in this country that are going to intensify over the duration of this life, of this fund's life. And our bet is at some point America will wake up to the fact that extreme weather volatility has unleashed trillions of gallons in one storm across the southeast last year alone. We saw six hundred and eighty billion dollars
Of wildfire costs last year alone. And in my city in Los Angeles, my co founder, Tamim, lost his parents' house, his sister's house, his brother's house. And still has not been able to move back into his house. And so I do think the costs of extreme weather, the new business models that will have to emerge and being able to help insurance address with these issues, I do think over the ten years of this fund, that wake up will go from
Contentious.
And maybe not even obvious too incredibly searingly obvious. And so Mike, our job is to think long term and not get too bogged down with what this administration wants on this particular issue. We're not gonna like sort of shift tack from things that we think have penciled obvious returns in ten years because of some hostility in the short term trim.
¶ AI, Decentralization, and Battery Innovation
Thank goodness. Yes. What are some of the things in general that give you the most hope right now for climate and for policy in Washington DC?
I mean, thank God for loan growth and for AI, right? I mean, I feel like a whole lot of venture capitalists are alive today. Maybe the entire economy is well functioning today because of those two things that are coming towards us. Uh it felt like In the 2021s, there was this uh kind of malaise in venture capital. The SAF.
Trade was over. Everyone was kind of looking for the next thing. Some thought it could be climate, and that resulted in a bubble and a lot of tourists and multi-stage funds coming into seed. That trade is now over because AI has taken off. And of course, the infrastructure layer of AI is endlessly interesting. It is a place where we could spend all our time and still have a whole lot more to invest and a whole lot more to learn than dollars and time that we have. Um, I think the rise of
decentralization across you know, everything, across currency, across warfare is coming to energy. And the fact of the matter is that the cost of generation has been less than The rate of inflation and the cost of transmission has been like three times the rate of inflation. And so if you just keep compounding that,
this will break at some point and you will see commercial and industrial loads going behind the meter. You will see more um mini-grids, you will see more islanding, you will see more decentralization of this like two trillion dollar modern machine that is going to look very different. over the next 30 years. And so that is a place of endless interest for us. I think being able to secure and optimize distributed assets in this new decentralized world.
f with zero trust cybersecurity for physical infrastructure with trading opportunities. with um optimization, reinforced learning uh algorithms to help them trade and bid assets, all of that is compounding at a at a searing speed. And just the regulatory nightmare. of these interconnection cues and challenges in supply chain make us really interested in how you're going to be able to use the distribution network to be able to get more things done.
And you're seeing a software like scale-up in batteries as a result. The battery kind of math is kind of astonishing. I think just to decarbonize the Texas grid, a Stanford study recently found that you're going to need 13.4 terawatt hours of batteries. To support the Texas power group, which is like one point five terawatt hours produced per year.
How many battery companies are in Overtur's portfolio?
We have a really exciting one called Moment Energy, which is looking at the fact that there are gigawatt hours of batteries driving around cars today that are gonna have to come out of those cars. And they have invented a battery management kind of software to be able to govern used batteries that can be collectively intertwined to be on.
grid kind of scaled storage for commercial industrial applications or for utilities. And the magic of their invention is that they can actually dynamically rebalance at the cell level and pack level. And so if you have one cell In an old Tesla battery that is faulty. They will dynamically rebalance away from that cell such that the pack and system can operate as promised. And as a, you know, it's you're not.
slamming and accelerating taking any this to 60 miles per hour in seconds, you're able to use this and have a lot of juice left in the system. And Moment Energy now works with Amazon and a host of other uh exciting customers with their product.
I love this. Super helpful. Also the subject of an entirely, you know, additional podcast episode that we're gonna have to do now show meek. So thank you for introducing all of these topics.
¶ Investing in High-Growth Climate Companies
I have one final question for you and I have a suspected answer to this and I'm very curious to see if it's the one you give. If I wired a hundred million dollars into your bank account tomorrow at Overture, what would you do with it?
I would follow on into some of our companies that are today compounding at astonishing rates of speed. I think Antora could very well be this one of the single most valuable companies I ever spend time on. And when you meet that CEO, Andrew Ponick and his co-founders, Justin and David, they have this unbelievable
unshakable faith in what they're building. The technology is still compounding today and improving. They've invented the world's most efficient thermal photovoltaic panels that have ever been known to science. They were on the cover of Science magazine for it. They have built this.
technology that is able to take electricity from trapped renewable plants and turn it into industrial heat and have demonstrated industrial heat capacity above eighteen hundred degrees Celsius. And they're in their first project. They are have contracted hundreds of millions of dollars and they are in full motion. And across companies like Antora and Harbinger and Crock.
and bedrock this geothermal technology that will produce zero carbon heating and cooling cheaper than any other form of technology known to the market. I see these companies and it's hard not to want to get out of bed and keep sprinting with them. And so I think The founders are the the thing that are the most inspiring part of my name. I have kids, so that's kind of a disturbing comment.
that answer. Shamik, thank you so much for joining the show. This was awesome.
So fun. Thanks for having me, Laura.
Shomik Duda is a co-founder and managing partner at Overture. The Green Blueprint is produced by Latitude Media in partnership with Charles Climate. The show is hosted by me, Lara Pierpoint. This episode was produced by Aaron Hardick and Stephen Lacey. Ann Bailey is our senior editor. Sean Marquand is our technical director. Stephen Lacey is our executive editor. If you'd like to suggest topics or guests for the show, send an email to thegreenblueprint at latitudemedia.com.
You can listen to the green blueprint at latitudemedia.com or subscribe wherever you get podcasts. And if you have a fellow clean energy or climate tech traveler who would benefit from the insights in the show, Send them a link. This is the Green Blueprint, a show about the architects of the clean energy economy.
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