How to raise ‘green’ equity finance – a VC’s perspective

Fhunded recently hosted a special Founder X Funder session in Preston in partnership with Sustainable Ventures and RedCAT Ventures (pictured above).

With a focus on some of the specific funding challenges faced by startups and scaleups working within the low carbon and net zero sectors, delegates came away with lots of practical advice and valuable insights regarding how to pitch opportunities to investors.

 In case you missed the Preston event, Stuart Ferguson – one of Sustainable Ventures Investment Partners – has summarised for us below some of his top tips for founders looking to raise within the green economy.   

Unless you have a core AI technology, trying to raise money at the moment isn’t easy for any startup. Beauhurst data shows that the amount of investment raised from VCs during H1 2025 fell 34% on the corresponding period last year, and many pundits are forecasting return to levels of funding last seen in the early 2010s.

Trying to raise money for climate-focused technologies is even harder, especially given the geopolitical challenges and the capex-heavy nature of many businesses.

However, it’s not all doom and gloom (as great ideas are still being funded), but it might just take a longer and require more kissing of frogs than a couple of years ago.

At Sustainable Ventures, we currently have the largest pipeline of opportunities we’ve ever had in our company’s 15-year history – which is testament to the repositioning of much of the UK’s innovation funding and academic research into technologies that can transform our industrial economy on the road to net zero.

In fact, we have seen over 1,600 opportunities just within the last 12 months, so it’s become even more important for founders to stand out from the crowd.

To help with that, here are some of my top tips to help increase your chances of a successful fundraise with a sustainability-based investment opportunity:

1) Do your homework

AI tools are increasingly being used by investors and founders to match with each other, however this can result in a lot of spam and missed opportunities due to the generic approach.

Spend time doing homework on your investors to a) understand whether you fit their criteria and b) whether you want to get into a long-term relationship with them.

Personalise your approach to those investors which fit the bill, and be prepared to build relationships early with potential future investors, keeping them up to date with milestone achievements.

2) Focus on your edge

Sustainable Ventures see lots of interesting tech, but the startups we really love are those that are completely focused on solving their customers’ biggest problems.

To help with that, be clear about what gives you clear competitive advantage, and demonstrate that you really understand why that customer problem really matters now (and the steps required for commercial adoption).

3) Understand your unit economics

We back founders who understand their supply chain costs, and have a credible pathway to a competitive price point. Our experience also tells us that customers aren’t willing to pay a green premium for product.

We also usually invest at an early stage when the startup is still finalising R&D (when the unit cost of production is significantly higher than its commercial scale equivalent).

So, when we assess opportunities, we are looking for evidence that the technology is – or can become – cost competitive with incumbent solutions.

4) Traction

It’s the word you hear from every VC, but traction really is the biggest determining factor as to whether you are likely to be successful.

Having a good chunk of revenue in the bank should make life relatively easy, but for those startups that are much earlier in their development, we look for evidence points such as letters of intent or customer pilots, grant awards or industry recommendations.

Ultimately it won’t matter how cool your technology is if you can’t prove that there is a willing customer base in place.

5) Be prepared

You might only get one chance with an investor, so practice your pitch and make sure all of the supporting data is ready to send if you get interest.

Momentum and timing is crucial in the process, so better to prepare fully before you launch to ensure any investors engaged with your opportunity aren’t left waiting for you to complete a crucial document.

6) Hustle

Pull every lever you can to get in front of investors, leverage warm introductions, and listen to early feedback.

You can follow Stuart on LinkedIn here, and find out more about Sustainable Ventures here.