Episode Summary
Executive Summary: Ben Courtling, partner at G2 Venture Partners, explains how his career evolved from Goldman Sachs alternative-energy investing to Kleiner Perkins Green Growth Fund and then G2’s spinout. He argues climate investing succeeds by backing industrial/hardware businesses only after they are already proving themselves, not by taking early science risk, and that the next climate wave will be more durable than Cleantech 1.0 because fundamentals, policy, and demand are stronger.
Main Topics: Ben’s path into climate and G2’s origin story (Priority: 5/5): Courtling describes moving from Goldman Sachs to Kleiner Perkins, building a green growth practice, and spinning out G2 in 2017 when Kleiner shifted away from cleantech. Lessons from Cleantech 1.0 (Priority: 5/5): He says the first wave taught him that hardware and industrial innovation require too much time and capital for normal venture timelines, so investors must back companies only once technology and business model risk have largely been proven. G2’s inflection-point investing model (Priority: 5/5): G2 does thesis-driven, fundamental work to find companies that are already winning and can become exponential outcomes, often through deep market diligence and customer checks. Market landscape and climate capital flows (Priority: 4/5): Courtling says the current environment is stronger than the 2007-2008 era because policy incentives, entrepreneurs, consumers, and business are aligning, and venture capital is returning to the space. Impact, additionality, and the role of capital (Priority: 4/5): He argues G2 adds value by helping businesses scale at critical moments, and that climate-focused investors can create real additionality through board support, team-building, and strategic capital. Capital intensity, regulation, and the need for patient pathways (Priority: 4/5): He distinguishes productive capital from speculative capital, warns against business models dependent on permanent regulation, and says government should help bridge first-of-a-kind gaps. Future of climate as mainstream investing (Priority: 3/5): Courtling expects climate to become embedded across the broader investing ecosystem rather than remain a standalone category, even as dedicated climate specialists continue to matter.
Key Arguments: Climate hardware businesses take too long and too much capital to fit traditional 10-year venture funds; investors should either use different capital structures or wait until businesses are already winning. Cleantech often has few huge winners, not many moderate winners, so the right strategy is to identify the eventual winners early in their scaling phase and concentrate capital there. The best climate investments are not chosen because they are VC-backed; they are chosen because customers are buying, customers love the product, and the unit economics are compelling. G2 is not really a 'growth' fund in the conventional sense; it is an 'inflection point' investor that often invests before the winner is obvious to the market. Hardware and industrial tech are necessary to solve climate change, because the biggest emissions come from energy, manufacturing, logistics, food, and agriculture systems. Institutional investors follow returns: if a climate manager delivers strong returns and DPI, institutional capital will come. Government incentives are helpful when they bridge a cost curve to eventual standalone economics, but not when a business depends on subsidies forever. G2’s value-add is active company building: helping recruit CEOs, shape strategy, and navigate scale in ways that can materially change outcomes. Climate change will likely be solved later than it should be; physical impacts will create the urgency that drives adoption. The transition will not leave everyday life unchanged; food, buildings, transportation, and industrial processes will all become more efficient and lower-carbon.
Data Points: Goldman Sachs alternative-energy investing period: 2005-2007 - Courtling says he began his climate investing journey at Goldman and built an alternative-energy investing group during this period. Wind/solar investment tax credit increase: 10% to 30% - He cites the Bush-era policy change as a catalyst that improved the economics of wind and solar. Unlevered IRRs on wind development: 15% range - He says wind projects were attractive on a project-finance basis in the mid-2000s. Kleiner Perkins green/growth split year: 2010 - He says venture and growth decision-making was eventually separated because the disciplines were different. Spinout year: 2016-2017 - G2 spun out of Kleiner at the end of the $1B Green Growth Fund and formally formed in 2017. Time until major climate-company outcomes: 14 years average to reach $5B value - He compares climate tech to general tech, saying climate companies took longer to mature. Time for software companies to reach $5B value: 9 years average - Used as a contrast to explain why climate investing requires more patience. First fund size: $350 million - G2’s first independent fund exceeded the initial target after a difficult fundraising period. Initial target for Fund One: $250 million - He says they originally thought this size fit the opportunity set. Fund Two size: $500 million - He says G2 is nearing the end of investing its second fund. Typical check size: $15 million to $50 million - Normal G2 investment range. Typical ownership/stage: Lead Series B, C, or D - G2 generally leads later-stage rounds, but focuses more on business stage than round letter. Annual deal flow reviewed: ~2,000 companies per year - He says the firm screens a very large universe to find a small set of winners. High-conviction watch list: ~50 companies - Companies G2 is actively monitoring as likely future opportunities. Total watch list: ~150 companies - Broader tracked universe of higher-quality companies. Investment pace in early growth fund era: ~$100 million per year - He references this as the scale of investing before G2 spun out. Tesla investor return from Model S era: 100x - He uses Tesla to illustrate the value created after a product became clear and market-winning. Tesla aggregate early investor return: 4.7x - He contrasts early existential-risk investors with later, product-era investors. Enphase market cap low point: $60 million - He cites this as a moment when G2 saw fundamental value others missed. Enphase current market value: $20+ billion - Used to show what can happen when a winner scales. Produce Pay scrap rate improvement: 80% reduction - He gives this as an example of climate/efficiency impact from supply-chain optimization. Crusoe round size: $350 million - He says G2 led a large round for Crusoe. Crusoe check size: $75 million - G2’s portion of the Crusoe round. Five-key companies referenced from Cleantech 1.0 exits: OSISoft, OPower, Silver Spring Networks, Enphase, Tesla - He points to these as examples of eventual winners from the earlier wave.
Pivotal Quotes: "We focus on investing in sustainable industrial tech businesses." — Ben Courtling: Defines G2 Venture Partners’ investment strategy. "Our discipline of our firm is around finding these winners at their inflection points, backing them, and helping them grow." — Ben Courtling: Explains how G2 differentiates itself from traditional growth investing. "Climate is the best investing opportunity that we will have for the next decades." — Ben Courtling: Direct message to a returns-driven institutional investor considering the space.
Implications: Climate investing is moving from speculative early science bets toward disciplined industrial scale-up. Winners will likely be fewer but much larger, and investors who combine deep technical diligence with patience and company-building can capture both returns and impact.