Episode Summary
Executive Summary: Jason Jacobs interviews Josh Felser about leaving Freestyle Capital to focus full-time on climate. Felser traces his climate awakening, explains why climate is the "cause of causes," and outlines how he’s approaching climate investing: starting small, prioritizing software and market-aware solutions, valuing impact alongside returns, and learning from past cleantech mistakes. The conversation also covers talent migration from tech, climate vs. deep tech, and the need for more inclusive definitions and better matching of builders, capital, and expertise.
Main Topics: Josh Felser’s transition from general tech VC to climate (Priority: 5/5): Felser explains why he left a successful venture career to work full-time on climate, describing it as both a moral imperative and an investable opportunity. Climate as the "cause of causes" (Priority: 5/5): He argues climate change worsens nearly every other social and economic problem, including health, inequality, and mental health, making it the highest-leverage area to work on. Learning path and early climate investing strategy (Priority: 4/5): Felser describes his early-stage process: small checks, hands-on help, learning from founders and investors, and avoiding areas where he lacks expertise such as deep science-heavy diligence. Climate tech vs. software, hardware, and capital intensity (Priority: 4/5): He discusses why software is underappreciated in climate, why hardware is capital-intensive and riskier, and why valuation/capital structure matter more than in traditional tech. Lessons from cleantech 1.0 and market structure (Priority: 4/5): The conversation revisits the first cleantech wave, including overcapitalization, hubris, and mismatched financing, while noting the current wave is more humble and better informed. Talent pipeline and community building (Priority: 3/5): Felser and Jacobs focus on how to help general tech talent enter climate, including education, matchmaking, community resources, and collaborative networks. Policy, incentives, and climate adaptation (Priority: 3/5): They explore how government, insurance, and incentives shape climate outcomes, especially around prevention vs. recovery, and why places like Florida raise serious climate questions.
Key Arguments: Climate is the most leverageable problem because it makes everything else worse, from physical health to mental health to inequality. The best climate investments are not always deep tech; software-enabled models can have meaningful impact and clearer paths to success. Probabilistic thinking matters: a technically exciting path is not necessarily the most likely to succeed or scale. The current climate ecosystem is more open, collaborative, and intellectually honest than the cleantech 1.0 era. Capital structure must match the business; some climate startups need project finance or hybrid structures, not just pure venture equity. Founders and investors should pair general-tech business talent with domain experts to increase odds of success. Many tech people want to enter climate but don’t know where to start; curated content, community, and introductions can lower that barrier. Policy can rapidly reshape markets, but climate action is often hampered because systems are designed for recovery rather than prevention. Climate investing should consider both impact and financial return; Felser sees no conflict between building large businesses and helping decarbonize. The definition of climate tech is too narrow and needs to expand to include circular economy, marketplaces, supply chain efficiency, and other leverage points.
Data Points: Acquisition value of Spinner: $320 million - Jason introduces Josh Felser’s track record as an entrepreneur/co-founder Acquisition value of Grouper/Crackle: $65 million - Jason introduces Josh Felser’s prior startup exits Twitter employee survey rank for climate: 7th - Felser recalls that climate ranked seventh among employee causes at Twitter Year of climate awakening article: 2012 - Felser says he read Bill McKibben’s "Global Warming's Terrifying New Math" in Rolling Stone in 2012 Year Hashtag Climate launched: 2013 - Felser says he started the nonprofit/app Hashtag Climate in 2013 Year he mostly gave up and returned to general tech: 2014 - Felser says he couldn’t get people interested and went back to general tech investing Approximate date of full-time climate shift: August 2020 - Felser says he started full-time in August after discussing the move in May/June Length of Freestyle tenure: 10 years - Felser says he had been at Freestyle for 10 years before shifting focus Number of months off for California COVID task force: 4 months - He took four months off Freestyle to work on the state task force Number of climate investments made so far: 4 investments - Felser says he has made four investments and expects a fifth soon Check size: $25k - He says he is writing small checks while learning Typical fund horizon: 10 years - Felser says he would keep a standard 10-year fund structure Potential battery capacity comparison: 90 kWh vs. 13.5 kWh - He compares his Tesla battery to a Powerwall to illustrate vehicle-to-grid potential Potential North America focus: North America / U.S. - He says he is investing globally in theory but focusing on companies targeting North America because that market is familiar Potential stage focus: Series A - He says he expects to start with a larger, Series A-oriented fund California EV policy horizon: 2035 - He cites California’s rule that no gas-powered cars can be sold after 2035 Wildfire recovery spend example: $50 billion - Jason mentions large wildfire-related recovery expenditures to contrast with prevention spending
Pivotal Quotes: "Climate change makes everything worse. Everything." — Josh Felser: He explains why he chose to focus on climate over narrower impact areas "It was like the internet in the late 90s, where everyone's collaborative and open and seeking to help each other." — Josh Felser: He describes the climate ecosystem’s current culture and how it helped him learn quickly "I think we need a new phrase. Describe what it is that we're doing... we need a more inclusive name." — Josh Felser: He argues that "climate tech" is too narrow to capture the full opportunity set
Implications: Climate is attracting experienced tech talent, but success will depend on better education, domain partnerships, and capital structures matched to each business. The next wave may be broader, more pragmatic, and more investable than cleantech 1.0.