A Woman-Led Fund Drives Climate Solutions While Championing Equity

In addition to backing innovative ways to fight climate change, the nonprofit investor is breaking barriers by intentionally seeking out a diverse set of founders. More than half of the companies Elemental selects are led by founders traditionally excluded by race or gender from many funding opportunities.

The statistics Lippert seeks to alter are stark. Just 1 percent of U.S. venture capital funding went to Black-founded companies, and 1.9 percent to women founders, in 2022. The gap also exists among fund decisionmakers; women comprise about 11 percent of investing partners at venture capital funds.

This is a loss not only for overlooked founders, but for society as a whole, Lippert said.

“My experience is that diverse teams are much more powerful. Having many different voices around the table is important to achieving pioneering progress.”

“Funding models like Elemental Excelerator’s are critical to scaling innovative solutions while simultaneously advancing climate justice,” said Maria Kozloski, Senior Vice President, Innovative Finance, The Rockefeller Foundation, which is supporting the nonprofit fund. “If we are going to stop or reverse climate change, we must make sure everyone can participate.”

Filling a Critical Funding Gap

Lippert has had a front-row seat to enormous change in climate innovation. “I started Elemental 14 years ago, but it feels like a new job every month,” she said. “We are staying right on the edge of what the sector needs.

“In the early days, the challenge was not having the right kind of talent to build companies. Then 2018 was a watershed moment, perhaps accelerated by the fires in California. Now, the innovators are there and have created important technologies.”

With the talent in place, “the current gap is in funding,” Lippert said. “But the Inflation Reduction Act has given us a lot of energy and is poised to fund many of these technologies, as long as we can get projects and teams ready. That’s where Elemental comes in.”

About half of Elemental’s team of 50 works on sourcing companies and then collaborating directly with them to spur growth. “We provide coaching as well as capital,” Lippert said, “because we are firm believers that the right person at the right time can save months and millions of dollars.”

As part of helping entrepreneurs build a market and a customer base, “we require our entrepreneurs to talk to communities before we invest, to make sure this is something the communities want,” Lippert said. “And we score companies on their community engagement, alongside typical investor scores and technology and business fundamentals.”

Elemental conducted a poll which showed 93 percent of their start-ups said partnering with community organizations helped them gut-check their value proposition, and contributed to their project’s success.

Refining Minerals Needed for a Green Transition

Megan O’Connor of Nth Cycle is among those energy innovators that Elemental backs. Her company has created an innovative way to recycle and refine the critical minerals needed to move out of the fossil fuel era, including cobalt, nickel, copper, and manganese.

Right now, the world does not have enough of these minerals to meet the demands of effectively fighting climate change, including making electric vehicles or the motors in wind turbines, she notes.

“These minerals are the true building blocks of green energy,” she said. “They are powering all of these devices that allow us to transition to clean energy, and we need more of them if we are going to be able to meet our climate goals.”

Her refining system is called the Oyster in honor of oysters, which refine waste into pearls. For the less scientific minds, she explains, it operates like a complex Brita filter, using electricity and water to recover critical minerals. Each filter isolates a particular mineral.

What makes the Oyster revolutionary? It uses streamlined, low-emission technology and a small footprint to take generalized waste and isolate badly needed minerals. And it can be brought directly to a mine or recycling site, instead of transporting the materials elsewhere.

The concept began with O’Connor’s appreciation for the circular economy and initially focused on recycling. But O’Connor did the math and realized “even if we recycle 100 percent of electric vehicles coming off the road in 2030, we will still only have a fraction of the cobalt we will need.” So she broadened her potential customer base to mines themselves.

Megan O’Connor, Nth Cycle CEO, in their Boston, MA lab. (Photo Courtesy of Nth Cycle)

As critical as these minerals are to a sustainable future, O’Connor has had to work hard to get those initial venture capital investments – $60 million over the life of the company. One Oyster is being turned on in Fairfield, Ohio in March, and six more are expected to be deployed by the end of 2026.

“I’m often the only female in a room and a younger female at that, so sometimes people don’t listen to us. Elemental was a phenomenal help. Not only the money, but the guidance—what should I be concerned about today? How do I build an executive team? How should I approach marketing strategy? All the things you need to consider in those early days.”

A Groundswell of Energy to Meet The Climate Challenge

One way Elemental is working to change that imbalance is through an internship program, Empowering Diverse Climate Talent (EDICT), that it supports with partners. By 2030, some 24 million new jobs could be created by the green economy, according to the International Labor Organization.

“People are not leaning back and saying ‘woe is me,’” Lippert said.