Sustainability Atlas
Future of Finance & Investing·16 min read··...

Interview: the builder's playbook for Venture & go-to-market for frontier tech — hard-earned lessons

A practitioner conversation: what surprised them, what failed, and what they'd do differently. Focus on unit economics, adoption blockers, and what decision-makers should watch next.

Only 2% of deep tech startups reach Series C, and a mere 0.4% achieve $10 million or more in annual sales. Yet in 2024, one in three venture capital dollars flowed into frontier technology—the highest allocation in a decade. Climate tech alone attracted $40.5 billion in VC and growth funding in 2025, with nuclear and clean energy representing 44% of energy sector investments at an all-time high. The paradox is striking: investors are pouring unprecedented capital into frontier tech while most founders still fail to cross the commercialisation chasm. We spoke with venture capitalists, successful founders, and commercialisation experts to understand what separates the companies that scale from those that stall in the "Valley of Death."

The lessons that emerged challenge conventional startup wisdom. Technical excellence, it turns out, is table stakes—not a differentiator. The founders who succeed are those who treat go-to-market strategy as a valuation-building investment from day one, not an afterthought once the technology is "ready."

Why It Matters

Frontier technology—spanning clean energy, advanced materials, synthetic biology, quantum computing, and AI-enabled climate solutions—represents the infrastructure layer of the global energy transition. The International Energy Agency estimates the world needs $1.8 trillion annually in clean energy investment to meet climate targets; venture capital provides the risk capital that de-risks technologies before they can attract project finance at scale.

Yet the funding environment has shifted dramatically. Early-stage climate tech investment declined 19-22% in 2024, the first clear contraction in a decade. Investors have pivoted from funding promising science to backing "category winners" with demonstrated commercial traction. Median Series B rounds reached $30 million—a decade high—while seed-stage funding has become increasingly difficult to secure.

For founders in emerging markets, the stakes are higher still. While the United States has attracted $147 billion in cumulative climate tech funding since 2018 (2.4 times China's total), the Asia-Pacific region is growing fastest for renewables and agricultural technology. African climate funds like Equator have raised $55 million to deploy capital where commercial infrastructure remains nascent but climate vulnerability is acute.

The gap between technical breakthrough and commercial success is not a funding gap—it is an execution gap. Founders who master go-to-market strategy capture disproportionate value; those who do not become cautionary tales studied in case competitions.

Key Concepts

The Commercial Bridgehead Strategy

The most effective framework emerging from practitioner conversations is the "Commercial Bridgehead Strategy," developed to help deep tech companies cross the Valley of Death. It comprises four interconnected pillars:

Advocacy: Building relationships with Key Opinion Leaders from academia, target industries, and ecosystem partners before launching awareness campaigns. Founders must become thought leaders, not just technologists.

Positioning Foundation: Validating positioning with credible sources—real customers who can advocate for product-market fit—before investing in broader marketing. Test messaging with prospects who will become references.

Whole Product Strategy: Mapping the full ecosystem into which your technology integrates, including technology stacks, system integrators, and professional services partners. These players become distribution channels and advocates.

Synchronised Media: Aligning public relations with overall commercial strategy. Awareness without a positioning foundation wastes budget and creates expectations that cannot be fulfilled.

Unit Economics as Investor Signal

In the 2021-2022 funding boom, investors tolerated "growth at all costs" mentalities. By 2024, the calculus has inverted. Venture capitalists now scrutinise unit economics as the primary indicator of commercial viability.

The metrics that matter include pipeline generated per sales head (segmented by market), sales representative attainment rates (investors prefer 60-70% attainment across a team rather than a few outliers at 150%), customer acquisition cost relative to lifetime value, and follow-on revenue growth from existing accounts.

"We used to ask founders about their technology roadmap first," explains one partner at a major climate-focused fund. "Now we ask about their path to first revenue and their expansion revenue from existing customers. The technology matters, but commercial traction is the primary filter."

Timing Asymmetries in Deep Tech

Deep tech funding timelines differ fundamentally from software. The journey from seed to Series A takes 12 months longer than traditional tech ventures. However, once companies reach Series B, deep tech accelerates rapidly—the median time between later-stage rounds decreases to approximately 20 months, versus 23 months for traditional technology companies.

This timing asymmetry has strategic implications. Founders must plan for extended early-stage fundraising cycles while building commercial foundations that enable rapid scaling once technical risk is retired. The companies that struggle are those that delay commercial strategy until after Series A, only to discover that investors at Series B expect demonstrated traction.

What's Working

Nuclear Renaissance and Corporate Offtake

The nuclear sector exemplifies successful frontier tech go-to-market execution. TerraPower raised $650 million in 2025 from investors including Bill Gates, NVIDIA's venture arm, and HD Hyundai. X-energy closed $682 million in Q1 2025, backed by Ontario Teachers' Pension Plan. These rounds were enabled not by technology breakthroughs alone, but by secured corporate and utility offtake agreements.

"The nuclear deals that are getting done have one thing in common: they've de-risked demand before they raise capital," observes an infrastructure investor. "Tech risk is acceptable; market risk is not."

Helion Energy's $425 million raise for fusion reactor construction follows the same playbook—strategic partnerships with Microsoft for power purchase agreements created the commercial foundation that made the technical bet investable.

AI-Climate Convergence

AI-enabled climate solutions have attracted outsized capital, growing from 7.5% of climate tech funding in 2023 to 14.6% in 2024. The AI climate tech sector raised $6 billion in the first three quarters of 2024 alone—a 20% increase over the entire previous year.

The success stories share a common pattern: they apply AI to problems with immediate commercial value, such as predictive maintenance for wind turbines, grid optimisation for utilities, and energy management for data centres. Exowatt raised $90 million in early 2025 specifically to provide clean energy solutions to AI data centres—a customer segment with urgent demand, clear budgets, and rapid procurement cycles.

Strategic Corporate Partnerships

Fervo Energy, the enhanced geothermal company, demonstrates how corporate partnerships accelerate commercialisation. Backed by DCVC and Breakthrough Energy Ventures, Fervo secured power purchase agreements with Google before its technology was fully proven at scale. The corporate commitment de-risked the venture for subsequent investors and created a reference customer that validated market demand.

"The best founders we work with spend as much time on customer development as technology development," notes a Breakthrough Energy partner. "They understand that corporate partnerships are not just revenue—they are signals to the market that the technology works and customers will pay."

What's Not Working

Early-Stage Funding Contraction

The 19-22% decline in seed and Series A funding has created acute challenges for companies still in technology development. Investors have consolidated around category winners, leaving promising early-stage ventures struggling to secure initial capital.

"There is a real gap in the market," acknowledges one seed-stage investor. "The best opportunities are often at the earliest stages, but institutional investors have moved up the maturity curve. We are seeing more companies die in the seed-to-A gap than at any point in the past decade."

The contraction is not uniform across sectors. Carbon removal funding dropped 60% in the first half of 2025, despite long-term demand signals from corporate net-zero commitments. Industrials, which represent 30% of global emissions, receive only 7% of climate tech funding—down from 17% in 2023.

Growth-at-All-Costs Mentality

Companies that raised during the 2021-2022 boom on "growth at all costs" narratives are struggling to pivot toward profitable growth. Investors report that the transition is harder than anticipated.

"We backed several companies that grew revenue 3-4x year-over-year but were burning $3 for every $1 of revenue," explains one growth-stage investor. "When we asked them to pivot to profitability, they discovered their unit economics fundamentally did not work at scale. The CAC-to-LTV ratios were inverted."

The lesson for current founders: build unit economics into the commercial model from day one. Investors will pay premium valuations for slower-growing companies with clear paths to profitability over fast-growing companies with structural margin problems.

Awareness Without Positioning

Multiple practitioners identified premature marketing as a common failure mode. Companies that hire PR firms and launch awareness campaigns before establishing positioning foundations waste budget and create expectations they cannot fulfil.

"We see this constantly," observes a commercialisation consultant. "A deep tech founder reads that they need 'thought leadership' and hires a PR agency to generate coverage. The coverage creates inbound interest, but the company has not validated its messaging with actual customers. The leads are unqualified, the sales team cannot convert them, and the founder concludes that marketing does not work."

The correct sequence is advocacy first (build KOL relationships), positioning validation second (test with real customers), whole product mapping third (identify ecosystem partners), and awareness campaigns last.

Key Players

Established Leaders

Breakthrough Energy Ventures — Founded by Bill Gates, Breakthrough Energy has deployed over $2 billion across companies with potential for gigaton-scale emissions reduction. Their $555 million Select Fund (January 2024) targets later-stage companies in electricity, manufacturing, energy storage, agriculture, and transportation. Portfolio includes Form Energy, Commonwealth Fusion Systems, and ZeroAvia.

DCVC — San Francisco-based deep tech specialist with $400 million+ in climate-focused capital. DCVC combines computational expertise with climate focus, backing companies in geothermal (Fervo Energy), sustainable aviation fuel (Twelve's $645 million round), and industrial decarbonisation (Brimstone). Their thesis centres on AI and robotics applied to physical-world problems.

Energy Impact Partners — Utility-backed investor with $4.5 billion in assets under management. Their $1.36 billion Fund III (October 2025) focuses on full energy system decarbonisation. Unique model partners portfolio companies with global utilities for pilot projects and commercial deployment.

Lowercarbon Capital — Founded by Chris and Crystal Sacca, Lowercarbon has deployed $2 billion+ across "slash, suck, buy time" strategies—decarbonisation, carbon removal, and cooling technologies. Known for bold bets including fusion (Commonwealth Fusion), geoengineering, and carbon-negative chemicals (Solugen).

Emerging Startups

Commonwealth Fusion Systems — MIT spinout commercialising compact fusion reactors using high-temperature superconducting magnets. Backed by Lowercarbon, Khosla Ventures, and strategic investors. SPARC demonstration reactor under construction with commercial power targeted for the early 2030s.

Fervo Energy — Enhanced geothermal company using horizontal drilling techniques adapted from oil and gas. Commercial power purchase agreements with Google validate demand. DCVC and Breakthrough Energy backing enabled rapid scale-up from pilot to commercial operations.

Twelve — Sustainable aviation fuel producer using direct air capture and electrolysis. Raised $645 million in 2024, one of the largest climate tech rounds of the year. DCVC-led investment reflects conviction in SAF as critical decarbonisation pathway for aviation.

Heirloom — Direct air capture company using limestone-based carbon mineralisation. Breakthrough Energy portfolio company with commercial deployments underway. Offtake agreements with Microsoft and other corporate buyers de-risk technology scaling.

Key Investors & Funders

Khosla Ventures — Vinod Khosla's fund has backed climate technologies from fusion (Commonwealth Fusion, $115 million) to agricultural decarbonisation (Nitricity, $50 million Series B for organic fertiliser). Known for bold, contrarian bets on technically risky ventures.

Generate Capital — Infrastructure investor with $10 billion+ raised across institutional capital and project debt. Pivoting toward M&A and consolidation of deployment-stage companies in solar, storage, and waste-to-energy. Model bridges venture-backed companies to project finance.

Prelude Ventures — Early-stage partner backed by the Simons family, founding member of Breakthrough Energy Coalition. Focus on advanced energy, food/agriculture, transport, and materials. Long-term commitment with acceptance of informed technical risk.

World Fund — Berlin-based European leader in decarbonisation VC with €300 million+ inaugural fund. Focus on scalable business models with significant emissions reduction across energy, food, manufacturing, and buildings. Critical for European founders seeking aligned capital.

Action Checklist

  1. Launch commercial strategy during R&D, not after: Begin customer discovery and positioning validation while still developing technology. Companies that wait until technology is "ready" lose 12-18 months of commercial momentum.

  2. Build KOL relationships before awareness campaigns: Identify 10-15 Key Opinion Leaders in your target industry and build genuine relationships. Their advocacy creates credibility that paid marketing cannot replicate.

  3. Validate unit economics at pilot scale: Before raising Series A, demonstrate that your customer acquisition cost and lifetime value ratios work at scale. Investors will model your unit economics forward; ensure the model supports venture-scale returns.

  4. Map your whole product ecosystem: Identify system integrators, technology partners, and professional services firms that will deliver your solution to customers. These partners become distribution channels and de-risk enterprise adoption.

  5. Secure strategic corporate partnerships early: Target 2-3 corporate pilot customers or partners before raising growth capital. Corporate commitments de-risk your venture for financial investors and provide critical reference customers.

  6. Plan for 24-month early-stage fundraising cycles: Deep tech seed-to-Series-A timelines run 12 months longer than software. Build runway and milestone plans accordingly.

  7. Track investor-relevant metrics religiously: Pipeline per sales head, representative attainment rates, CAC-to-LTV ratios, and expansion revenue from existing accounts. These metrics matter more than technical milestones for growth-stage fundraising.

  8. Consider non-dilutive capital strategically: With 11 debt rounds exceeding $1 billion in 2024, debt financing has become viable for capital-intensive deployments. Structure projects to access project finance and preserve equity for genuine risk capital needs.

FAQ

Q: How should frontier tech founders think about the current early-stage funding contraction?

A: The 19-22% decline in seed and Series A funding is real but not uniform. Investors have concentrated around category winners with demonstrated commercial traction, making differentiation essential. Founders should focus on three areas: first, secure pilot customers or corporate partnerships before raising, as commercial validation now matters more than technical progress for early-stage investors; second, target specialist deep tech and climate funds (Breakthrough Energy, DCVC, Lowercarbon, Prelude) that understand longer timelines; third, consider non-dilutive funding including government grants (DOE, ARPA-E, EU Innovation Fund) and corporate R&D partnerships to extend runway. The companies succeeding in this environment are those that treat early-stage fundraising as a 24-month process and build commercial foundations in parallel.

Q: What unit economics metrics do investors prioritise for frontier tech companies?

A: Investors have shifted from growth metrics to profitability indicators. The key metrics are: CAC-to-LTV ratio (customer acquisition cost relative to lifetime value), with expectations of 3:1 or better for recurring revenue models; sales team attainment rates, where investors prefer 60-70% attainment across the team rather than a few high performers; pipeline per sales head segmented by market, demonstrating repeatable demand generation; and expansion revenue from existing accounts, proving that customers derive ongoing value. For hardware and infrastructure companies, investors also scrutinise gross margin trajectory—expect to demonstrate a path to 40%+ gross margins at scale, even if current margins are lower during pilot phases.

Q: When should frontier tech companies begin go-to-market activities?

A: The consistent practitioner advice is to begin commercial strategy during product development, not after technology is validated. Specifically: customer discovery should begin at company formation, with founders spending 30-40% of time talking to potential customers even during R&D; positioning validation should occur 6-12 months before commercial launch, testing messaging with prospects who can become early adopters; ecosystem mapping should be complete before Series A, identifying partners who will distribute and implement your solution; and sales team hiring should begin 2-3 quarters before commercial launch to allow for ramp time. The companies that struggle are those that treat commercialisation as a phase that begins after technology development—by then, competitors have captured market position and investors have lost patience.

Q: How important are corporate partnerships versus financial investors for frontier tech companies?

A: Both matter, but serve different functions. Corporate partnerships de-risk ventures by validating market demand, providing pilot deployment sites, and creating reference customers that enable subsequent sales. Strategic investors—corporate venture capital arms—can provide both capital and commercial pathways, though founders should carefully evaluate governance terms. Financial investors provide the capital to scale and typically offer more founder-friendly terms. The optimal strategy is to secure 1-2 strategic corporate partnerships for commercial validation, then raise from financial VCs for scale capital. This sequence maximises founder control while building the commercial foundation that growth investors require. Companies that rely solely on financial investors often struggle to demonstrate commercial traction; those that accept too much strategic capital may face governance constraints as they scale.

Q: What distinguishes frontier tech ventures that cross the Valley of Death from those that fail?

A: Analysis of successful commercialisations reveals three common factors. First, technical founders who develop or hire commercial expertise early—the best teams have commercial leaders in place before Series A, not after. Second, broader market scope combined with robust IP portfolios—companies that target multiple applications and protect their innovations create more durable trajectories than those with narrow focus. Third, alignment between technical roadmap and market demand from day one—successful founders build what customers will buy, not what is technically interesting. The failures share opposite patterns: purely technical founding teams, narrow product-market strategies, and technology development disconnected from commercial reality. Deep tech funds report that commercialisation strategy quality now weighs equally with technical excellence in investment decisions.

Sources

The frontier tech funding environment has matured from exuberance to discipline. For founders, this represents both challenge and opportunity. The capital is available—$40.5 billion in 2025 alone—but it flows to ventures that demonstrate commercial sophistication alongside technical excellence. The builders who succeed will be those who treat go-to-market strategy not as an afterthought, but as a core competency developed from day one. The playbook is clear; execution separates the companies that scale from those that become case studies in what not to do.

Topics

venturefrontiervaluationprivate credithedgingtransition planopex

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