257 | Fund Your Climate Startup the Smart Way with Dimitry Gershenson
Our guest this week on the pod is Dimitry Gershenson. Dimitry is the Co-Founder and CEO of Enduring Planet - they ofter growth capital for climate entrepreneurs that is simple, fast and founder-friendly.
Resources mentioned in this episode include:
Fund Your Climate Startup the Smart Way: Interview with Dimitry Gershenson, CEO of Enduring Planet
NOTE: While it’s not perfect, we offer this transcription by Otter.ai for those who are hearing impaired or who don’t find listening to a podcast enjoyable or possible.
Dimitry Gershenson Awarepreneurs Interview
Mon, 7/18 2:45PM • 53:44
SUMMARY KEYWORDS
founders, climate, business, capital, dimitri, called, funding, people, planet, entrepreneur, folks, build, community, enduring, space, commitment, collateral, startup, lots, money
SPEAKERS
Paul Zelizer, Dimitry Gershsenson
Paul Zelizer 00:02
Hi, this is Paul Zelizer, and welcome to another episode of the aware Awarepreneurs podcast. This podcast is all about the intersection of three things, conscious business, social impact, and awareness practices. Each episode, I do a deep dive interview with a thought leader in this intersection. Someone who has market tested experience and is already transforming many minds. Before I introduce our guests on our topic, I have one request. If you could go over to Apple podcast or whatever app you're listening to the show on, hit the subscribe button, do a rating and review. It helps people find our message and amplifies it, it costs you nothing and it takes you just a few seconds, please consider it. And thank you. Today, I'm thrilled to introduce you to Dimitri Gershenson. And our topic is Fund Your Climate Startup the Smart Way. Demetri is the co founder and CEO of Enduring Planet. They offer growth capital for climate entrepreneurs that is simple, fast in founder friendly. And full disclosure, I just became a scout for Enduring Planet and I'm a big fan of the brand. I'm not just the casual observer. We can talk about what that means. I love what they're doing. I'm doing everything I can to help. And I think you're gonna love with Dimitri and his team are doing. Dimitri, welcome to the show.
Dimitry Gershsenson 01:20
Thank you so much, Paul. It's such a pleasure. I'm so stoked to have this conversation.
Paul Zelizer 01:25
Yeah, climate, right. Let me just say, I live in New Mexico, and we’re not quite through June and have had the worst fire season in the recorded history of New Mexico. And why - because of climate change. It's a conversation that's very much on my mind.
Dimitry Gershsenson 01:44
You know, I think unfortunately, as time moves on, the conversation will be on everybody's mind all the time. This problem will not get better for a long, long while. And, you know, we had 116 degree heat wave last year in Portland, I'm in Portland, highest recorded temperature by a large margin. I mean, it was as hot as Death Valley at the time. And, you know, it's a, it's both a pretty terrifying time, but also a time of great optimism for folks like me, who sees so much really incredible activity and commitment in the space, that I think in the long term gives me a lot of hope about our future.
Paul Zelizer 02:32
Got a lot of work to do. And there's some really smart, dedicated people working on it. So we're going to get all that in a second, Dimitri, but because it's a challenging time, and you're like, right there on the front lines of helping people make change and have hard conversations, it's really important. I think, for us to have some wellness or resiliency practices. Tell us about what do you do in that department to resource yourself for this really important, but not always easy work?
Dimitry Gershsenson 03:03
Oh, man. A few things. So one is I have general anxiety disorder. So I take anti anxiety medication, that helps not something I recommend for everyone, obviously, but if you you know, folks like me, it's a pretty powerful tool to I'm very mindful about when and how I work. So one of the things that my co founder, co founder and I decided when we started this company was that we would build it around a work culture that we want to have from day one. Rather than having this like, hustle, break yourself thing for a while, and then eventually settling into a culture that we want. Like, we wanted to make sure that the company could operate with us contributing a reasonable amount of time to the business. From the moment we sort of kick things off, we both have young children, like co founder and actually just gotten off mat leave, right before she joined. And so I think that actually contributes a lot to wellness. And resilience is just like building the right foundation for how and when you work. And I think, you know, another one that's maybe less obvious is to just build a community that you can be candid with, and really lean into it really spend time talking about what's our, what's working well get outside perspective, because I think as an entrepreneur, it's very common that you are sort of beholden to the cycle of things going well and poorly which like, something's always going well and something's always going poorly. And if you don't have somebody else to remind you, of the things that are going well, it's really easy to get stuck thinking only about the things sort of going poorly. And so I have a number of advisers who are like, formerly advisors to the business. So they called equity. And I talked to them regularly, we have a lot of friends who are fellow entrepreneurs in climate, but also elsewhere who I have regular syncs with. And, and those moments are really powerful, because you can, you can really let go and say, Hey, like, I'm struggling with this thing, or, Hey, I've been really in a funk and, and that person can then provide you the support that you need. I mean, obviously, like this, this should not take place of, of therapy, if you're seeing a therapist, it shouldn't take place of, you know, coaching or counseling or whatever you like sort of more formal mechanisms for reflection. But I think these informal ones are actually can be really powerful as an entrepreneur. Great suggestions,
Paul Zelizer 05:46
Dimitri. And, and I'm thinking as you were sharing, like, this thing that's entered into our vocabulary called climate anxiety, like, like, we're literally going into some terrain that some folks would much rather ignore. And when you start to get into it, it's like, wow, these are big, complicated problems. And to feel a little concerned about them and feel a little nervous about it, like it only make sense. And to normalize, like, you're saying, Hey, this is hard stuff. And maybe some of us already have wiring to feel more anxious. But then when we get into this work, a lot of us notice whatever tendencies we might have already have, like, I certainly wake up in the middle of the night sometimes, and I'm like, wow, we are in a big complicated situation here. And sometimes that brings up anxiety for me. So it's both like, our personal wiring, but also where we are as a human family. And I so appreciate that wisdom of like having relationships, both professional and personal, where we can say, hey, I'm having a hard time or I'm feeling particularly like, ah, humans, we got work to do. So thank you for that. And I was just thinking, as you were talking about anxiety, we literally have this thing called climate anxiety now that so many of us are dealing with and and to be vulnerable about that it's so important. Totally. So we're gonna get into this work of funding climate solutions. Dimitri, if somebody didn't know who you were, wasn't familiar, their background, like, give us a little bit like, why did you get excited about funding climate startups? And like, why you like, what kind of background do you bring to funding people doing good work?
Dimitry Gershsenson 07:38
Yeah, you know, I wish, it's funny, I wish I had a better story for how I got into climate in the first place. So it's actually it's been my career. From the very beginning. I did my undergrad and Applied Ecology and natural resource management, I spent some time in the Peace Corps in Latin America working on on clean energy access, and sustainable agriculture and clean cooking. I then ended up at Berkeley and undergraduate degree in energy and resources and spent a bunch of time East Africa, I then moved to Facebook and built their energy access program and did a bunch of investing out of that program into clean energy deployment and access and clean energy finance and emerging markets. You know, I like I had this path, and I'm skipping steps here. But I didn't start because there was some moment where I was like, walking in the woods, and, you know, it was a forest fire. And I was like, Oh, my God, you know, climate, this is going to be my thing. I actually got into the space because my brother got a degree in natural resource management from the same university. And when I got there, I was looking at journalism and criminal justice, and lots of different anthropology. Like, I think I tried four or five things. And then finally, my, the, the Honors Program, like advisor at college at Rutgers University, where I went school, sat me down was like, You got to pick something. And I was like, Okay, well, my brother did this degree, maybe I'll do this degree. And, and, and from that moment on, I like sort of aligned myself with this kind of environmental bent. And then, when I joined the Peace Corps, I realized that for me, the thing that really mattered was not necessarily saving the planet. Because I think there's gonna be lots of like conservation biologists and folks who disagree with me, but I think on a planetary timescale, you know, we could do immense amounts of damage, and a billion years later, like, nobody will care, right? We won't exist, but the planet will look different, but it will be fine. There's been catastrophic events that have changed the face of this planet many times. And life has continued to sort of rebuild and grow the thing that is really terrifying is what happens to us. And in particular, what happens to the most marginalized populations, like low income populations, populations and developing countries, we are at the beginning of a period of potentially incredible suffering. And so as someone who experienced that firsthand, I kind of I made a decision then that like, I would find a way to enable solutions to this problem through my career, and that has taken lots of different models, like I thought I would work in policy for a while, then I was going to work in in sort of finance, and then I was running accelerator programs, and then I was an operator. And then finally I said, Okay, well, I think that one of the things that I could do today, and this was sort of a conversation I had about a year ago, was, how do we how do we create a system by which climate entrepreneurs, whether they're sort of building startups or small businesses, they can access money quickly to grow and actually solve this problem on a timeline that might make sense for, for people. And what that meant is building a platform that can offer capital quickly and at scale to as diverse a founder population as possible. And so that was the impetus for underemployment was to create a space where an entrepreneur of any shape, size color could come easily apply for funding, and then walk away with a check on a timeline. That is, I would argue, kind of unheard of today, like, eventually, if we are successful, folks could apply for funding and have money in their bank account that same day. It's a it's a long journey to get there because automating lending at that scale is difficult. But you look at I don't know, clearbank, for example, they do something similar in E commerce, you know, you can get a term sheet in 20 minutes and money in your bank account the same day. So we we have a similar goal, similar scale aspirations. But for us, we're honored percent committed to climate, we we have a we prioritize investing in underrepresented founders and diverse teams. And we're going to offer lots of different instruments. So today, we just do revenue based financing. We get into that later. But eventually, we want to have a suite of capital products, where founders can come they can sort of pick their menu, apply and walk away with capital to go and continue building. Whatever they're building.
Paul Zelizer 12:42
When you were talking about how you got into this work, I was smiling, you happen to know my brother. Yeah, right. So you've got a family kind of thread running through your work. And big shout out for my brother, Craig Zelizer, who is more on the impact careers side of things. And I'm more on the impact entrepreneur side of things, but impact work runs in the family. Shout out to your brother and a shout out to my brother.
Dimitry Gershsenson 13:09
Yeah, and my brother is actually also an entrepreneur also runs a like an impact tech business. It's called supply shift. They do supply chain sustainability, and management and risk management and all sorts of like ESG, called measurement. And you should have him on this podcast because he's awesome. Yeah, well, we'll
Paul Zelizer 13:32
put the brothers in the show notes, folks, go check out. I've never had that happen before. But hey,
Dimitry Gershsenson 13:38
Greg, you and Greg could interview the two of us.
Paul Zelizer 13:42
Oh, that'd be so cool. Alright, anyway, we'll put links in the show notes. And we'll continue the conversation about the brothers. Going back to funding and climate Demetrius. Again, listeners, I'm a little bit more familiar with enduring planet than some of the other brands. But one of the things I've heard you talk about Demetri is you're very precise about how much money it's going to take to move the needle. And that was I found that very comforting. And actually, when you looked at that number, you said, you know, we're actually we've moved the needle to a certain degree already. Tell us a little bit about that research that you've done?
Dimitry Gershsenson 14:20
Yeah. So there's quite a lot of debate around how much annual investment into climate it would take. For us to be able to sort of meet, call it a two degree warming scenario. And for folks who don't spend a lot of time in climate, the international community has kind of coalesced around a limit to how much warming we as a society can accommodate before it gets really bad. It's going to be bad. But the question is like when is what is that threshold for when the harm will be really existential, and that number is sort of two degrees Celsius, average warming across the planet and Every consultancy everything tank has done their analysis of how much money it would take. And this is spending across government corporate investment in decarbonisation project finance venture financing, you look at the whole kind of bucket. And I think climate policy institute has done a really excellent job of measuring these flows over time. And the number that I like to lean on is five, 5 trillion a year. It's kind of the roundest. If it makes sense to me, I think that was the number that like McKinsey put forward. And 5 trillion a year is, in terms of the global economy is not a lot of money at all. But it seems like a really insane number. Today, if you take all of the flows of money that can be categorized as sort of like funding for climate, where it around, at least as of 2021, it was like 650 or 700 billion a year. So you can do the math, we're quite a way short. But we're also not like, it's not nothing. And that number is growing pretty dramatically every year. And so the question is, how do we collectively change the trajectory? Because because that number needs to be happening from basically now until 2050. And so we have to ramp up to that really quickly. And so how can we all play a role in driving that investment and there's obviously levers that actors and corporate like corporate sort of CSR ESG roles can can play? You know, you look at the large commitments from like Amazon and Microsoft and the advanced purchase commitment from from meta and Stripe for carbon removal. Then there's like private sector activity, both on the project finance, corporate finance side, there's a lot of opportunity there. And then there's government funding, you know, which, which is expanding globally growing every year. But again, like this is, it's not a drop in the bucket. But like, it's a shock blast on the bucket. And we got to fill the bucket every year.
Paul Zelizer 17:15
You and I talked to climate entrepreneurs all the time, I just talked to a young person who grew up in Albuquerque has a fabulous startup. And we were talking about getting them connected. I'll literally yesterday like that's, that's really common for your night. But if somebody is listening in, they're like, Okay, it's cool. There's money flowing. But but they don't really know what examples that they don't have a lot of like concrete, here's what a climate business looks like. Can you give a couple examples of some of the climate businesses that you're excited about?
Dimitry Gershsenson 17:48
Sure. So I often get asked this question, which is like, which segments of the market are you most excited about? And which is not your question, but I thought I'd answer it first. And my answer is everything. So I am a firm believer that everything about our society needs to change in order for us to meet our climate goals. And we're entering this new era of like a new climate economy. And so for me, a business that creates lower carbon diapers is as exciting as a business that, you know, helps corporates manage emissions, is as exciting as a company that does sensors for, you know, remote power systems to enable greater deployment of renewables. Like, for me, they're all kind of similarly exciting. I mean, I'd probably be lying to say if like, if somebody invented fusion tomorrow, like real fusion, I'd probably be most excited about that, because it's basically zero carbon free energy forever. But I think in the general realm of what I'm seeing today, it's, it's also encouraging. So for us, anything that supports the new climate economy is in scope. That means that any company that is supporting decarbonisation, so like the reduction of emissions from existing sectors, that could be household emissions, corporate emissions, industrial emissions, it doesn't really matter, any company that's supporting the removal of carbon from the atmosphere, and then anyone who's enabling greater adaptation and resilience for people, for communities, for businesses, all of that is in scope for us. And so, you know, we draw the box really broadly, because it's, we don't really want to be players who like, decide what's going to have most impact. What we want to do is fund this transition. And that means funding everyone in this transition. And it also means that it's not just, you know, big idea of venture bankable startups. In fact, our third transaction is with a what arguably is called a small medium sized business and It's because I think that every every like sort of business model can play a role. And so in the SMB community, we're excited about, you know, businesses that are doing solar sales, lead gen energy efficiency, retrofit, community composting, like you name it, if it's reducing emissions and helping communities, households businesses sort of meet this challenge, then it's of interest to us. Does that Does that answer your question?
Paul Zelizer 20:31
Totally does. Yeah. Thanks for that. Yeah. So our titled today's fun, your climate startup the smart way, before we get into the smart way? What's the dumb way? Maybe we should say the challenging way? Like, what are saamiya? What are some of the like problems or issues that climate startups you know, run into, and they're trying to get funding?
Dimitry Gershsenson 20:53
So I think that the, the, you know, we've we've seen basically every flavor of like, call a capitalization for a business. And I think that often, maybe the thing that I'd call, like, the dumb way is just the, the non informed way, like a lot of a lot of founders will build a business in the space without really doing their homework about the capital options available to them at the time. And they won't continue to do that homework, even after like, even if they did it the first day, the first day they started, they won't then go back and look again. And so there are folks that we talked to who will say Oh, well, there's only venture capital available, or oh, there's, you know, there's no x in the market. And it's like, well, one, everything's changing every day. And to some of these assumptions were just never true, right? There's a lot of, I think, pernicious narrative, in the space around how let's like focusing on sort of venture bankable companies, how venture bankable companies should be funded, which is through venture, right. But the thing about venture capital as an instrument is that it is incredibly expensive. It changes the control dynamics of a company. It has lots of like hair on it. So complexity to the instrument, covenants, requirements. And, and also, it's, like very biased, right, like less than 1% of venture capital goes to black founders. And that's bonkers. Because black founders aren't any worse at starting a business or running a business or building a business. But because the venture capital community is predominantly white, and male, they predominantly fund white males. And so, you know, I think that I encourage every climate entrepreneur, that EIV to really do their homework. And there's, there's fortunately starting to be more resources around the sort of, like stack of capital options. We collaborated with climate tech BC on a piece last fall, which was, I think, called the climate capital stack. There's other folks producing sort of knowledge around this today that will be published in the next, you know, call it a few. I don't want to say because I'm not allowed to say, but, and we also produce, like thought content on this, we actually have a weekly blog that we publish at the intersection of climate entrepreneurship of capital. And so I think, to answer your question, I don't know if I would call anything necessarily the dumb way. But there's just like, the uninformed way of saying, Okay, well, this is what I heard is right. So I'm just going to do that. And, and it does a disservice to actually everybody involved, not just you as an entrepreneur, but also to the investors, to your customers, because it changes the dynamics of how you build your business in a way that generally isn't aligned with, like the optimal. And I think maybe I'll end by saying, I don't have anything inherently against venture capital, like where a VC backed startup, I think venture capital is incredibly powerful tool. But I think often it's overused. And that's the problem. And so entrepreneurs who have an opportunity to blend VC funding with other funding, whether it's grants or death, or you name it, they should, and there's lots of trade offs to consider. And that's where the like, the process gets both challenging and really interesting is that if you, if you start to think about it in terms of sort of like a holistic fundraising strategy, there's a lot of opportunity to optimize and get really clever with how you enable your business to grow over time.
Paul Zelizer 24:39
Thanks for that Dimitri, and listeners. I don't know if you've been catching up, but Dimitri has been dropping resources. I'm in Policy Institute, climate tech VC, the internal planning blog, if you're like, wait, wait, wait, what was that? I'm taking some notes here and there'll be in the show notes, you can find those links. So let's do this in a moment. I want to hear actually li How does enduring planet work? How can somebody apply? What is this founder friendly thing you're talking about and a bunch more. But before we do that, just want to take a quick break and hear a word from our sponsor. I'm excited to announce that we have a new sponsor for the pod. Saybrook University. Saybrook University prepares students to challenge conventional thinking in business, social structures, mental and physical health and more. They have innovative online and hybrid programs to help students become part of a global community. They offer certificate, Master and doctoral programs, and they're guided by renowned faculty with years of experience in their respective fields. Saybrook is committed to helping students achieve their full potential, and their sacred community is deeply rooted in this humanistic tradition. CEPR graduates are transforming healthcare providing organizational leadership, developing sustainable practices, and caring for populations and be open to business and non business majors like, say bricks 100% online Master of Business Administration Program is designed for students who are passionate about conducting business operations guided by the principles of sustainable social impact. Their hybrid online Doctor of Business Administration Program is designed for experienced professionals who are interested in exploring and applying the most recent research and theories regarding organizational and social systems change. You can learn more@saybrook.edu There's a link in the show notes. And thank you to Saybrook University for sponsoring this pot. So welcome back, everybody. In the second part of the show, Dimitri, what we like to do is joke about putting on our entrepreneur glasses. So if you put on your entrepreneur glasses and just look at enduring planet right now, like you mentioned this product that's here, like, what is the product who's applying who's a good fit for it? How do people find you, etc, etc.
Dimitry Gershsenson 27:09
Yeah, so the first step is probably getting on our website, we do often end up talking to founders before they've actually seen it. But we've, we've tried to build a platform where transparency is sort of front and center. So our terms are public. So you can actually put download our template term sheet, we have an extensive FAQ that helps people understand how the product works, we have a calculator that enables people to estimate how much financing they could raise based on some sort of assumptions. But simply put, if I'm a founder in climate, and I have a startup, or a small business based in the US, so today, we just invest in the US, we will be international eventually. And I'm looking for capital, I would come to enduring planet and go to a dirt.com. And there's a little button at the top that says Get Started. And I would hit that button and submit an application for revenue based financing. Now, maybe before I talk about the application process, I'll tell you what revenue based financing is. So revenue based financing is an unsecured credit instruments, so it's debt. But unlike traditional debt, there's no collateral, there's no personal guarantee. And there's often, at least in our cases are very limited. Like covenants, it's super simple. We give you money, and you give us a portion of your top line revenue for fixed term. So in our case, we typically land on a one to two year term, we'll go up to three, we lend today between 105 100k, that number will go up quite a bit next year. And we typically invest in exchange for called between one and 10% of top line revenue. And so what happens after you sign the deal is we give you the money. And then at the end of at the start of every new month, we look at the preceding months, cash transactions, and we look at all of the revenue that's coming into the business and we take our part. And that's the like, that's the financial instrument in a nutshell, there's, there's, you know, I could get into the details around sort of like how we structure it, how we predict future revenue, how we provide sort of both upside protection for the founder, but also downside protection for us. But at a very high level, that's the model. A founder can apply on our website for funding in about 10 minutes. We can get them a term sheet in a week. And we can fund in 30 days. And eventually we want to compress that down dramatically. So that that's that's the case now. That's just the capital. So we also maintain a pretty large network in the climate space. And we're very active investors and so we share deal flow with it. For 200, VCs and climate and so we'll help people raise venture capital. And we actually do that for folks that aren't customers of ours. So if we like what you're building, we'll share your materials with VCs in our network. We also have a community of partners, everything from folks who build financial models to folks who do accounting and bookkeeping. For folks who do brand development growth strategy for SAS businesses, like you name it, we probably have, I don't know, a couple dozen partners today. And that list is also growing all the time. And then event at times, we get operationally involved in a business. So a founder could come to us and say, hey, you know, I'm struggling with this challenge. Do you have any experience? And if we do, then we'll, we'll help advise and give them perspective.
Paul Zelizer 30:45
was just there was so much there to meet you. One of the things that I love, just love about how you work and how you think my language for it is, its echo system thinking, yes, you're offering right now this one form of funding, there's several more that are in the works. And we'll talk about that in a second. But this revenue based funding, and there's some really cool things there that I want to highlight and come back to you. But what you just said at the end there listener, notice what Dimitri was saying, like, even if you're not a fit, or not even applying, but you're in the climate space, this is an incredible resource. And one of the things I've come to really appreciate about you, Dimitri, is you really care about climate as a space, not just those people who qualify for enduring planet funding, which, you know, then it would make sense, there's kind of self interest, right? Like, we want to take care of our people, because you know, like your business is, it's giving us our money back. And if you have problems, that's gonna lead to promise for us, of course, you're gonna help those people, but the way you participate in the climate and care about the climate entrepreneur ecosystem as a whole, I just celebrate that. Appreciate that. And listeners notice that not everybody does that. And thank you for that approach. Dimitri.
Dimitry Gershsenson 32:04
Thanks, Paul, I, you know, the way that I think about it, is, when the world is on fire, we can't really be self centric. It's going to take all of us to, you know, keep keep society standing. And I think that it behooves us all, especially folks in the capital community, to do everything we can to help folks that are building solutions in the space, access the money that they need. Because in the end, you know, whether we like it or not, like we exist in a capitalist system, and things only succeed if they have access to capital. And so we don't, we actually share deal flow, not just with VCs, but also with other lenders. And so if we can't fund your business, because it's not a fit, or you need more money, or it's a different thing, you're looking for a different product or something, we have half a dozen partners, that we regularly send transactions to and say, hey, you know, this wasn't a fit for us, but we're happy happy to help you underwrite this deal, because we think it's promising. And I think that there are, there needs to be more of that. And I meet founders and investors every day, take the same posture. And, and frankly, I think they're more successful, because to your point, like, yes, it would be more self serving to only support the founders in your portfolio. But frankly, I also think it's like, it's not entirely altruistic to not do that until like, support everyone. Because in the end, it comes around, right, like folks that we introduced to VCs, even if we're not investors, they will often come back to us for funding, they'll also connect us with other entrepreneurs, because we help them like, if we, if we all just play nice, like, we'll all do better. And this is something that I often found really frustrating about the venture community is there's this like adversarial competitive nature to it. But the thing is, like, climates unique. And this is a world where we're literally changing the face of how our entire structure works. And so there's infinite opportunity. And so, like, why not just help each other? You know, I, to me, it doesn't. The alternative doesn't make sense.
Paul Zelizer 34:35
Absolutely, Dimitri, and when I heard about the Scout Program, like I never thought about, like helping to have fun, get people to, you know, to be investors in entrepreneurs, businesses, even in a lot of entrepreneurs never really thought about it or in when I heard about what you're all doing, partially again because of how you operate, but also like We're staying in. Like I said earlier, New Mexico has literally been on fire. This is not a like an analogy, we literally have been on fire, it's an incredibly close to home to me and like this needs to change. And I know a lot of people and you know a lot of people and they're really smart people pulling for enduring planet trying to help it thrive and grow as fast as humanly possible because the world is on fire. So I'm 100% aligned. Also want to go back to something you said earlier, Dimitri, just want to highlight listeners, this is language that maybe some of our listeners aren't familiar with, in the smart way of funding your climate startup. One of the things at least in the product you have live right now, the revenue based funding, you use the term unsecured, in other words, you're not putting up your home or retirement account as collateral for that, and during planet looks at the revenue of that business. And that's the primary metric for deciding who gets investment who's a good fit, and how much if you are a good investment you get. So there's a firewall there, that isn't always true. When people are really excited to get some funding. It's not that uncommon for founders to put their biggest assets on the line. And I'm not saying that's wrong, or somebody shouldn't consider it. But it does mean that your home or your you know, your future terms of retirement bonds could be if things unintentionally don't go well, that they're at risk. And this puts a firewall up and there's not risk there in that way. So that's another reason why it appealed to me. It's like, wow, this is an area and impact area I'm really dedicated to but when you talk about smart, you're thinking about the well being of the entrepreneur. Of course, we want everybody to succeed. But we know entrepreneurship is a risky venture, it's it, there's inherent risk, and you're not saying you, founder, co founder are personally responsible. This doesn't make it you're looking instead, hey, they've already got some traction, we're using that to leverage more resources. So it can have a flywheel effect. Is that fair to say, Dimitri?
Dimitry Gershsenson 37:28
Yeah, I mean, I'm really glad you're one of our scouts. I think, you know, this is one of the things that really is really important to me personally, and to our team is that we build financial products for founders that are truly founder friendly. And I think that how sort of security collateral, these things are managed traditionally, in lending is huge talked to lenders, they'll argue that their products are as founder friendly as it gets, and that they're managing risk effectively, they're measuring risk effectively. And I think that, you know, one of the challenges that founders face is that often, they're not given a lot of options around how to make these trade offs, right, like, and so in our case, we're very transparent, we say, Look, you know, this is how much the capital costs, and the capital is more expensive than a loan that's secured against your house. And that's okay. Right, like, of course, it's going to be more expensive, we're taking more risk. But at the same time, if you're, if you have the assets, and you have the collateral in the business, you want to put your IP up with a lien, like, whatever the mechanism you want to use to get a lower cost of capital. As long as you're doing it with open eyes, like, please, please go do it. You know, we we've had founders that we've talked to where they've come to us, and they said, Well, you know, I can have this credit line. That's, that's got a personal guarantee on it, and, you know, collateral or whatever, and it's x, and then you're making me this offer for y. And it's more expensive. And we say, Look, if you're willing to take that risk, then by all means, please do it. I would never, like convince you otherwise. You know, I think there's other value in our product, like, are the payments for revenue based financing track with revenue. So if you have a bad month, then you're not on the hook for principal and interest payment that you wouldn't be with the traditional term loan. And so that that sort of like safety is very valuable to founders. The fact that they don't have to do a personal guarantee or put up business collateral or do like a lien on IP, or have covenants that prevent them from spending money or raising money in certain ways. Founders find that useful. You know, we also like there's other factors to consider when raising capital, right? Speed, complexity, legal cost. These are all things that you need. Keep in mind as you go to raise capital, right, if you're, if you're going to spend a month, every day, working with a lender to raise a month worth of runway, it's not worth it. Right? If it takes you three hours to raise three months of runway, and you know it, like, then it might be worth it. And so these are, these are like, this is when I talk about really approaching this process with open eyes is that founders should really consider all of the different elements around not just the money that they're raising, but how they'll spend the money. So, you know, there's certain things that you want to raise venture for, because they're like long term durable investments, IP, your team, while certain team members, you know, facilities, and then other things where if you can you fund it with that, like marketing, you know, near term growth initiatives, inventory, there's like so many different pieces of a business where, because the payback is really short, it doesn't make sense to raise venture capital, which has long horizons and really high return expectations.
Paul Zelizer 41:12
Thanks for laying that out, Dimitri. And mostly, we've been talking about this revenue base funding product you have, but you've got other things on the horizon. Tell us a little bit about that.
Dimitry Gershsenson 41:22
Oh, I'm always, I'm always a little hesitant to tease but I, because you know, stuff stuff goes wrong. But one of the things we're really excited about is offering founders capital sooner against a really expected revenue stream. So that could be a grant. That's upcoming, it could be a Pio that they expect to get paid. It could be on an invoice. It could be, you know, like a milestone on a partnership, where, you know, the works already been done. But there's some wait period, like we think that bridging those gaps can be a really powerful tool, especially for teams that are very runway sensitive. And so this fall, we're going to be launching a new product that does that in one of the spaces I mentioned. And I think our goal is to offer, you know, about one to two new instruments a year for the foreseeable future to continue to expand the base of who we can fund. Both call it earlier stage and later stage, as well as increasing the amount of capital we're willing to commit per borrower. So today that's capped at 500,000. But we want to increase that number called 10x. By next year.
Paul Zelizer 42:44
Beautiful, very exciting. So something we just kind of lost by a little bit. But again, one of the things I was like, Ooh, I really like your commitment to this. You mentioned it earlier, but talk a little more. The enduring planet has a real commitment to funding women founders and founders of color. And we know from in all spaces, and I was on LinkedIn just earlier today. And there was a fabulous conversation going on in the climate entrepreneur space. Somebody put something up there were 290 Comment and 290 engagements on that. And I just started scrolling through, I'm just curious, okay, here's the conversation happening on our online kind of living room or our water cooler in the impact space. And of those 290 people who hit like, or, you know, insightful on LinkedIn, I think, at least visibly, there were two people of color at a 290. Just a little like data point from earlier today. Now, not all climate circles look like that. But that's not uncommon, unfortunately, at least in my experience and enduring planet has really has a robust commitment. Something similar is true for women founders in the space. We know, in general, the VC funding is about 2% for Women and less than 1% Women in color and I'm sorry, people of color and women of color. It's yeah, it's it's much less than 1%. And this is something in Durham planet is really committed to talk to us about that commitment.
Dimitry Gershsenson 44:20
So our commitment to supporting underrepresented founders and diverse teams is in our corporate DNA. So when we formed the company, we actually created a public benefit corporation and so we had to draft a effectively perpetual mission statement and that includes our commitment to diversity and inclusion. We also entrenched called di lending criteria in our our risk card and credit policy. So every time we assess a business, we actively look at whether or not they meet one of three di criteria, and then that actually adds points to their like if they meet Dumb, it improves their chances of getting capital. You know, our pipeline today. Last time we did an analysis was about 70% meeting that criteria. So that means that companies either had a founder of color or a woman, or maybe I'll use a different category, I'll just say like an underrepresented founder, basically, like not a white guy. Or they had a diverse team. So at least 50% of their team met that sort of, like underrepresented box. And we, there's lots of like categories that fit into that people with disabilities, you know, non button on non gender, non binary gender, like, lots of different boxes to tick. And then the third one is that a company that's focused exclusively or primarily on serving the marginalized communities. So it's actually a model that's kind of similar to Cape or capital. That's where we got a lot of our inspiration. It's a team out of Oakland, Mitch and Mitch and Frieda que por they've been doing a really incredible work investing in underrepresented founders and companies serving marginalized communities that sort of bridge gaps for for marginalized people. And, you know, we were very intentional about where we source transaction. So we have lots of partnerships with folks who can give get us access to founders of color, women founders, and again, other other underrepresented founders, we sort of built our scout community with that in mind. We also like, if you look at the content we produce, we feature underrepresented experts, as much as we can. And, you know, we, every time we make a decision, we try to ask ourselves, like, how do we? How do we do the best that we can in this context, and, you know, are lots of places where we could still do better, you know, our team could be more diverse. We are majority women today. But like, you know, there's just one dimension. And so, you know, as we build our own hiring strategy, were always actively thinking about how to how to create a really like, impactful, diverse team. We also work with the companies that we invest in, to build better practices around hiring inclusion, you know, board representation, like you pick, we attempt to help them get better. And over time, we're going to expand those, those activities. So we, you know, we want to build partnerships with organizations that also support underrepresented founders and diverse teams, we want to provide better resources to our portfolio companies, like we're just getting started.
47:51
Awesome, thanks for that commitment to meet, you
Paul Zelizer 47:54
really appreciate it. So you're a busy guy. And we have very busy listeners, I could hang out with you all day. But I want to be respectful of your time. So if there was something that you were hoping we would get to in our conversation, and we haven't touched on it yet, Dmitry, or there something you want to leave our impact founder listeners with something that they can take, and something that you've learned as you built this incredible company and are building it and want to pass on to them to hopefully help them have more impact and grow more successful companies. What would that be?
Dimitry Gershsenson 48:33
I think maybe, I'd say two things. One is that it's really easy to submit to the reality of our situation when it comes to climate, and kind of give up. And I think that now, and really, every day from now on is not the time to give up. It's the time to double down. And so if you are anxious about climate, and not working in climate, it's an incredible space to join. And there's infinite opportunity. And really every role, any role is welcome. Right? Like you whatever you're doing today. You know, if you're able to switch jobs, not everybody is, but if you're able to, you can probably find it an opportunity working in climate. And so, I think if you're pessimistic I think it's easy to do that. But I also think that if we don't all act, then what are we even? What are we doing? Right? Like, then we'll look back 1020 30 years from now and say, Oh, we could have done more. So I think that's one and and, and look I want to be frank like lots of Folks don't have the opportunity or resources or privilege to be able to change jobs, we all work in climate, like I get that there's nothing wrong with not working in this space. But if you can, you should. So that's one and then two I would suggest to all founders, and whether they're working climate or other impact areas, are really in anything to build communities of fellow founders, and to really, leverage shows communities for, for support for introductions for resilience for for feedback, like, I, we would not be here, where we are today, if it were not for fellow founders and climate. And I, I like, I did not really understand what it meant to have that kind of community when I first started, I always thought of founders as like kind of being on their own island with their little batch of investors like doing their own thing. And in reality, a lot of the folks that I know that are really successful, they have, you know, some people will call them like shadow boards, or, you know, they'll have advisors that are on their cap table, not on the cap, table paid and unpaid. And often, those are other founders and it, you cannot imagine how much value you can get out of having those types of relationships. And so I hope if you if you're building a company, and you don't have three to five, fellow founders who are at similar stages, building, they can be in a related field, the same field different field doesn't really matter. Like, being an entrepreneur is pretty unique. And having folks to share with is incredibly powerful. And so that would be my my sort of like second recommendation.
Paul Zelizer 51:51
Well, Dimitri, thank you so much for being on the show today. It's it's been fabulous having you here.
Dimitry Gershsenson 51:56
Thank you so much. This was awesome. And I'm really excited to see it out in the world.
Paul Zelizer 52:03
So listeners go check it out. It literally cost you nothing to apply. I know, from the inside, you can apply. And even if you're offered funding, you don't have to take it. And as you heard, we've got somebody here really thinks about the ecosystem and your well being, even if it's not quite a fit for you to take in this particular product that's live now. Start a conversation. If you're in the climate space, Dimitri is an incredibly connected guy and really thinks like an eco system builder. That's my vocabulary for a relational businessman, somebody who cares about the space, please go check out the room during planet site, tell your friends and all the information will be in the show notes.
Dimitry Gershsenson 52:46
So thanks so much, Paul. You're welcome.
Paul Zelizer 52:49
So before we go, just want to say we love I mean, love listener suggested topics and guests. If you've been listening and you say, Oh, I know somebody that aware of foreigners should interview, go to our website. On the Contact page, we have three really simple guidelines, we try to be really transparent what we're looking for. And if you go check, check, check, send your idea. And for now, I just want to say thank you so much for listening. Please take really good care and these intense times. And thank you for all the positive impact that you're working for in our world.