Carbon Enterprise Value (Issue #127)
+ REPORT: Climate Offtake Agreements. This CEO loves his haters. Pessimists sound smart, but optimists make money.
Good morning, folks.
In today’s 2-minute read, we’ll cover these four nuggets below — as delightful as a campfire with your kiddo where smores are the meaning of life.
Climate Startups & Investment:
#1 — 🌫️ TOOL: Carbon Enterprise Value
#2 — 🎁 REPORT: Introduction to Climate Offtake Agreements
Productivity & Leadership:
#3 — 🤓 “Pessimists sound smart, but optimists make money”
#4 — 😡 This CEO loves his haters
Onward and upward,
Chris
P.S. Want more? Read 125+ prior newsletter issues here.
#1 — 🌫️ TOOL: Carbon Enterprise Value
If carbon accounting and discounted cash flow modeling had a baby, it might look like this:
This tool answers questions like:
Are avoided GHG emissions today valued the same as those in the future?
How can we turn something complicated (e.g., Scope 4 emissions) into a simple metric to compare across companies?
What discount rate should I use for this calculation?
Can you give me a calculator to use?
Thanks to my friends at Lime Rock New Energy for advancing this conversation. 👍
#2 — 🎁 REPORT: Introduction to Climate Offtake Agreements
If you’re going to graduate from VC funding to project finance**, then please read this from the good folks at CREO.
Their report covers tactical nuggets such as:
“Most climate companies negotiate offtake terms for 6-18 months with each buyer and aim to sign contracts 3-15 months before a project’s financial close.
The entire timeline can be 9-33 months for a company to sign an offtake with a buyer and receive funds from a financier.
Financiers generally prefer that 85-95% of total volume is guaranteed through one or several offtakes. Most loan agreements require 70% total volume offtake at a minimum.
Most offtakes are 10+ years long and should extend beyond the length of the loan required to construct a project for surety of cashflow.”
See pages 6-13 for the most actionable info.
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(** This “graduation” is not optional. It’s a requirement if we’re going to scale climate solutions with much greater volumes of capital at far cheaper costs.)
#3 — 🤓 “Pessimists sound smart, but optimists make money.”
This gem of a quote comes from Nat Friedman, former CEO of GitHub.
It’s easy to SAY WHY things will NOT work. And then do nothing.
It’s hard to SEE HOW things WILL work. And then build something.
Let’s build.
#4 — 😡 This CEO loves his haters
In a book I read this weekend, I found this from the author:
“Too often we recognize those who loved us and supported us, and we forget those who were our competitors, haters, or critics. Those who have doubted me have a special place in my heart. I was tempted to list their names, but I would need several pages to list them all. Just know that I love you, and I’m extremely thankful for you.”
That was CEO Patrick Bet-David in his book Your Next Five Moves: Master the Art of Business Strategy.
This relates to another entrepreneurial truth from VC investor Josh Wolfe.
“Chips on shoulders put chips in pockets.”
The moral of the story:
Don’t waste the opportunity to turn others’ doubts into your fuel for growth.
🤲 Small favor to ask you.
If you enjoyed this newsletter, I’d be grateful if you sent it to 2-3 friends right now.
We gotta spread the word about optimism and opportunities in climate tech. 🙏
That’s all, y’all.
Make it a great week, because it’s usually a choice.
Cheers,
Chris
Founder: Entrepreneurs for Impact
Climate CEO Peer Groups | Podcast | LinkedIn
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(As evidenced by these photos, I’m an actual human. Not an AI. 🤫 I promise.)
