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But now, it’s time for Pancakes with Putin…
Do the ends justify the means? That is the question we ALL ask ourselves every day.
Is being healthy worth training hard at the gym or skipping that tasty dessert?
Is your marriage worth more than that potential one night stand?
Are EVs and the energy transition worth overpromising on Tesla production and “full self-driving” capabilities…?
Where do we draw the line?
For example: Many climate VCs are starkly vegan. Many won’t even invest in technologies to mitigate the effects of animal agriculture.
They are “extremists,” in a sense, more worried about morals and righteousness than impact and actually solving the problem (more on that here).
The same could be said of LPs - specifically who startups & VC funds take their money from.
Saudi Arabia has been making waves in the VC community by announcing their LP stakes in many top venture funds. Because what better PR is there for the Kingdom than showing the world that they fund leading innovation?
Andressen literally went to the Kingdom to do a big “Saudi itself is a startup” dog and pony show and will probably announce a new Saudi fund any day now.
And of course, Adam Newmann is being Adam Neumann and chasing money wherever it comes.
But are they wrong? Sure, skepticism and criticism are warranted. And yes, oil money is dirty and comes with human suffering, pollution and baggage galore.
But at the same time, we also need to F*ing solve climate change.
If you were starving to death and Putin offered you pancakes, would you save yourself and eat or die in silent protest? Are your morals worth more than the mission itself?
Which brings us back to “enemies of the free world” and investing in climate tech…
We’re all on Team Planet together and regardless of Musk’s views on living in a simulation or moving to Mars, this is the ONLY planet we have for a VERY long time.
We have to save our planet and mitigate the effects of climate change or we’re looking at world wars, mass refugees, resource conflicts and much more…
The outlook is ABYSMAL.
Which brings us back to the question: do the ends justify the means?
Are we climate investors better off avoiding controversial LPs (like China, Saudi Arabia, Qatar etc…), or taking the money of ANYONE who is willing to invest?
Because every single dollar deployed into climate and cleantech now will have exponential impacts on our future?
Is earning money for dictators worth possibly avoiding a climate catastrophe?
Just food for thought…
What do you think? Would love to hear your thoughts and feedback in the comments below.
Would you take LP money from totalitarian regimes? Why or why not?
And what if Andressen or Sequoia announces a major Saudi fund… would that change your mind, once the “taboo” had been taken off the table?
Do the ends justify the means?
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NOTE: The above is purely hypothetical and not to say that we have Saudi LPs (or even a fund per se) and merely thought to stimulate and much needed public debate on the subject.
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If so, we’d love to hear from you.
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Dear Matt,
Thanks for this interesting post. I really appreciate you starting an open discussion on this topic. Usually, the consensus in media in the West tends to lean towards funds coming from oil and gas nations (of which most are totalitarian as described in your article) as being “dirty” and should be avoided by VC funds and startup founders. I my opinion, this is an overly simplistic view to have.
For the record, I am pro stopping climate change, anti-totalitarian regimes, and pro liberal rights, however when listening to the debate on this topic, it usually leaves me thinking that the worry of climate change itself is built on foundation of privilege: Shall we combat climate change? Shall we only eat vegan? Do our investors/LPs have morals (whomever defined those)? Those are concerns we can afford, when we have a roof over our head, running water, electricity and the right to live freely.
There are other factors that should be considered apart from our western views on what we believe is right or wrong.
1. We thank our development in the West to natural resources and especially fossil fuels stemming mostly from countries we would define as totalitarian today. So, I see a responsibility on our side to develop a joint energy transition feasible for everyone not just a selected group of people.
2. Climate change affects all of us and we need to get all countries on board. It doesn’t help to leave countries behind and create a green and democratic West, when i.e. developing countries in Asia and the Middle East still heavily depend on fossil fuels and other natural resources and have no incentive to change (at least short-term).
3. Immense potential for political, economic, and social development for aforementioned countries. Most countries have realized the need for development of alternative cash flows in the future and want to diversify (i.e. Vision 2030 Saudi Arabia). By excluding the capital right away, we might close a door for social development. I believe long-term stability can be generated by smart future investments (i.e. infrastructure, local ecosystems, sustainable energy generation) by natural resource rich countries, while capital is still being generated from "dirty sources".
4. It’s not just about the capital itself, but also about the deployment of climate technologies and future markets. Those countries represent target markets and industries that need be incorporated when creating a holistic transition.
5. I would see employing capital for the cause of climate protection always as a preferred option to other forms of investments, which might even create more damage to the climate. If it is (becomes) lucrative, more capital will flow, which again, fuels joint actions to stop climate change.
So, I am wondering, what happens to those countries if the West closes off and if VCs and Startups don't allow investments from those countries? Shouldn’t we think long-term and rather see this as an opportunity for positive development along the entire triple bottom line including our morals instead of an “either or”?
My five cents. Interested in your feedback and any other opinion on this topic.
Lisa