Navigating Climate Tech: 6 Tips for Founders

From a candid conversation at Tech Nation’s Climate Programme Launch, Sammy Fry, our Head of Climate, shares six tips for climate tech founders in today’s environment.

In today’s macroeconomic and geopolitical context, climate tech founders face a complex environment. The realities of capital constraints, investor expectations, and the personal toll of entrepreneurship make this a uniquely demanding time for building and scaling startups.

As part of Tech Nation’s Climate Programme, the likes of Irena Spazzapan (Systemiq Capital), Marta Krupinska (CUR8), Pippa Gawley (Zero Carbon Capital) and Katya Constant (Founder coach and ex-CFO, ZeroAvia) gathered to discuss the global climate tech landscape, and the realities of business ownership in 2025. 

Here are six tips to consider:

1. Consider Your Business Environment

There are numerous forces at play which are shaping the state of climate tech entrepreneurship today, namely government austerity and extreme market volatility.

Western governments are financially constrained, and spending cuts are practically inevitable even as defence budgets rise. What’s more, the instability of global economics has heightened risk, which affects investor behaviours and public-private capital flows. 

These realities make for a tricky financial backdrop to business ownership, yet it’s important that climate innovation delivers compelling commercial value. Business propositions should align with hard economic realities. Look past who’s in office and focus on long-term, systemic trends.

2. Understand Your Capital Stack

Climate tech is not a homogenous category—hardware, software, and deep tech ventures require very different capital stacks.

Importantly, VC isn’t for everyone. There are numerous alternatives to VC funding. If your model doesn’t scale fast with high returns, other routes (such as grants, family offices, asset-backed debt), may work better.

Understanding your options and planning early is crucial. Founders should map their long-term financing strategy and align it with business goals, technical readiness, and commercial traction.

Use external tools to guide you, such as the Climate Brick, which segments climate tech businesses into seven sector-specific bricks’ based on capital and IP intensity. This highlights key milestones and success factors geared towards scaling, helping you target investors at the right time.

3. Focus on Commercial Traction

A point that came up was the importance of de-risking your business by selling early. Prove that your startup isn’t just a science project by gaining early customers or even providing letters of intent. Commercial validation must be built in early, especially for technical teams. 

Remember, high valuations are reserved for companies that demonstrate scalability with low burn, so don’t underestimate capital efficiency.

4. Reframe Your Value Proposition

ESG budgets are shrinking and buyers are under pressure. Now more than ever, founders should be thinking differently.

Just offering climate impact is no longer enough, you should position offerings around supply chain resilience, regulatory preparedness, or cost savings.

Bear in mind that combining SaaS, carbon markets, and financial intermediation can diversify income streams, and having flexible revenue models is important.

Founders are leveraging AI tools across operations to do more with less, and protect team wellbeing – so stay up to date with how you can be operating at maximum efficiency.

5. Protect Your Team

The strongest predictor of success remains your team. People are both your biggest risk and greatest asset. 

It’s important to invest in culture early. Offsites, conflict resolution tools, and clear decision-making processes are all vital procedures in the early stages of business ownership. Also, co-founder alignment is everything, and departure or disagreement can detail momentum.

Also be aware that talent may live beyond the eco-bubble. The best hires may not lead perfectly green lives, and that’s okay.

6. Consider Your Own Wellbeing and Purpose!

Building a climate venture is emotionally and physically taxing. Other founders shared the importance of staying connected to your purpose and being able to ask for help. Remind yourself why you chose the entrepreneurial path, and keep sight of the privilege in doing so! Peer groups, mentors, and community are essential lifelines. 

Being able to handpick our problems, people, and path, in a word of constraints, is a privilege worth protecting. It’s undoubtedly difficult, but as the climate sector matures, the winning companies will be those who combine bold visions with grounded execution. 

Building a startup is not just about changing the world, but about navigating it with clarity, humility, and resolve.

Click here to find out more about Tech Nation’s Climate Programme.