Mission Possible: Climate Tech with Mike Winterfield, Active Impact Investments

Welcome to ‘Mission Possible: Climate Tech’ with Xan Winterton, a Q&A focused on the Climate Technology Industry.

This Q&A Series will be led by our Managing Director & Head of Climate Tech, Xan Winterton. Xan will be speaking with the movers and shakers across the climate technology sector, the folks that are galvanizing change to make our planet greener, cleaner and dare I say it serener!

This week we have been in touch with Mike Winterfield, Founder & Managing Partner at Active Impact Investments.

Founded in 2018, Active Impact Investments is a Certified BCorp based in Vancouver, BC, whose mission is to support environmental sustainability through profitable investment. With two limited partnership funds with over $50M in assets under management, they provide funds and talent to accelerate the growth of early-stage climate tech companies with $200K to $3M in revenue and significant growth potential. Active Impact’s portfolio includes and is seeking some of the most successful startups in North America that are capable of achieving venture scale and becoming extremely profitable while solving the most urgent environmental issues.

Your investment thesis is focused on four areas (Clean Energy & Transportation, Infrastructure & Carbon Solutions, Sustainable Food & Water, Circular & Sharing Economy); Which of these areas have you seen the most growth over the last 2 years and why do you think that is?

Clean energy and transportation. They are huge industries, the costs have come down so much for renewable energy that it’s cheaper than burning fossil fuels almost everywhere on the planet now, the user experience is better, it’s highly complicated electrifying everything at the same time as moving to intermittent and distributed power sources.

Active Impact Investments has had a lot of success over the years. Starting at fund one, what would you say sets your fund apart from others in the space and what enables you to find repeat success in investing in the right companies?

Those are definitely 2 very different answers. What sets us apart the most from other funds is our post investment support. We are very hands on when it comes to sales, talent and fundraising. But the repeat success comes from our proprietary process for assessing talent. We have certain traits that we test for that we believe are the essential ingredients to winning founders. 

Having seen thousands of pitches from founders on a yearly basis, what are some common mistakes people make that you think are easily correctable? A bit of advice for our entrepreneurs out there!

Most founders spend WAY too much time talking about the problem and their idea and think their idea is more novel than it is. Investors want to invest in a fully baked cake so pitches should spend equal amounts of time discussing; team, competitive advantage, differentiation/moat, market size, market pull, traction to date, capital efficiency, etc

A lot of people are interested in getting into VC and particularly impact investing, as someone who didn’t have a typical path into the space, what would be your advice to someone who wants to get into venture capital, are there some steps that can help them?

It’s hard so you better love it. My advice if you are going to do seed stage is that ideally you have run companies before and aren’t afraid to get your hands dirty. You also have to be in this for the long haul to make sense. It takes a long time to build trust and build your network and gain pattern recognition.

Can you discuss any recent success stories or milestones achieved by startups in your portfolio that demonstrate the impact of climate technology?

SWTCH is doing over $30M a year now in EV charging implementations, King Energy now has over $100M in contracted solar rooftop assets, Dispatch Goods has now saved 5M plastic items from landfill by re-using them and collectively our portfolio has now mitigated over 1M tonnes of GHG emissions. 

As a seed investment fund, when analyzing startups, there’s not often a lot of historical revenue to go off, what characteristics in the founders do you index most on to see if they have what it takes?

I believe that people who have always found a way to be successful in whatever they were doing will find a way to be successful again so sometimes your data isn’t on the most recent startup but on other jobs or endeavors they had in the past. And yes, you are right that there won’t be a lot of revenue and margin data to analyze early but pace is one of the most important things to gage when you are investing and some people just move a lot faster than others and try more things until they get to what really works. 

Who in particular within the Climate Technology space inspires you?

I’m so lucky that this is my job. I get inspired every week by founders in our portfolio and new ones pitching to us. I can’t believe there are so many talented people on this planet (that are focused on climate now). But if you want to look at something really big then Elon was pretty inspiring when you realize what he was able to accomplish with Tesla (number of people driving his car, quality of the car was a game changer, enterprise value of the company, positive impact to the quality of the air we breathe, etc). Bill Gates/Breakthrough Energy, John Doer/Kleiner Perkins and Bill Gross have inspired me a lot on the investing side