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0:10 path to building a thunder at lizard starts here. Learn more at energytechnexascom. Welcome back to

0:16 the show. Today, I'm really excited to have with me Yao Huang, who is a climate investor focused on the 40 gigaton problem of decarbonization She's an investor, a tech veteran with over two

0:30 decades of experience in technology and investing. She has founded companies to help corporations launch new innovation initiatives and is on the board of carbon optimum. Welcome to the show Yao.

0:42 Thank you for coming down here. And she's down here from New York. Really excited to have you here. And I thought we could get started with why don't you tell us a little bit about yourself, your

0:52 background, your experience in tech, and then how it eventually led you to where you are today in into climate investing and on the board of carbon optimum. All right, I'll tell you my origin

1:03 story. There you go, good. There you go. So, I mean, I've been in tech for 20 years. I think a lot of people have just been in that, it's the boom space. And during the pandemic, had a lot

1:16 of time to read books, read Bill Gates' book on climate. And when I put the book down, I had two conclusions. And it led me to change my entire trajectory. The two conclusions were, oh my God,

1:30 the big boys don't got this, which are like the governments, the billionaires, and the people who are in power. 'Cause the conclusion of the book is we don't know how this is going to pan out. We

1:39 don't know that the solutions are, he lays out all the different ways CO2 is coming out. He lays out the different solutions there, but it's like, we don't know. And then the other conclusion was,

1:48 and this was probably very naive of me, like I knew this was happening, but I didn't know it was gonna impact me so much. I didn't know I was gonna suffer I thought I'd be dead by the time the

1:58 suffering started. And so the point that I was going to suffer, I was like, ah, I should probably do something about this. If I have the resources and the opportunity, and we're at the moment in

2:07 time, we could make a change, let me put down the keyboard for code, whatever, and let's see what I can do. Anything, I want to at least try in my lifetime if this is how I'm going to go. And

2:22 now you see it, a lot of people are suffering in different ways Biggest hurricanes you've ever seen, fastest winds, floods where there were no floods, safe zones and no longer safe, fires

2:33 everywhere. And that's a lot of suffering. And so I was like, what can we do to reverse this? And the science tells you and we look for solutions and every scientist says, you look at the science

2:45 community, they've come up with everything ready. So now how can we get it out there? So I don't have to invent the wheel, I just need to get it rolling. And so that's how I got into this space

2:56 and I started knowing nothing. And I took courses at Stanford, I had mentors, I read a lot of books, I had advisors, I looked at a lot of deals. And basically, I went into the area I knew,

3:07 which is investing. So I was like, all right, I had my investor friends send me a lot of deals and I started looking at them. And talking with the founders is how I got educated. And I made a few

3:17 decisions that led to my thesis, which is if we don't have a lot of time and I wanna make change, I need solutions that are ready to go And 90 of them are still in RD phase. So they know they just

3:31 haven't figured all the components out. So I'm like, can't be involved with those right now. I'll only look at the ones ready to go. And with teams that are pure in mindset. So I think the

3:43 climate community has a lot of that. What does that mean by pure in mindset? Yeah. So the climate community, I think a lot, you have a lot of that. In tech, less so. Tech is all about making

3:52 money, getting rich, Lamborghinis, right? Right? Ah, the Vegas parties with Dom, right? So you don't work on climate just to make money. It's too hard. You can make money. I think business

4:05 by definition needs to make money, but that's not the driving point. It's easier to do tech if all you cared about was making money. I mean, there's a, did you real estate can make money? You

4:14 sell cocaine, you can make money. I see my mouth is gonna come on. That's your story. That's all true. There's so many ways to make money, but tech, when you go get your various rounds of

4:25 funding, it is to make money for the investors in five to seven years when their fund has to retire. So you're building a company to get money, to make more money to eventually either sell through

4:38 an MA or IPO, so you can make more money. This whole, I wanna change the world is, no, you could say those words, those words can come in your mouth, but really the underlying activities are

4:49 all financially driven, right? In climate, I see two things. Everyone wants to try to fix it. Actually, a lot of them don't have revenue models. And they, a lot of, and that's fine because

5:02 they were scientists who invented the solution. They tend not to have a lot of business people and finance people, not all, but a lot. And definitely the early stage ones. And there's a

5:16 difference between business and finance. Business is like figuring out how this thing operates and maybe the revenue model at the finance. In climate, having been at it now for four years, the

5:27 financing stack for this is unique. It's different than tech. So what the problem is a lot of these companies are running off of the tech playbook because those books are written, the movies, the

5:39 magazines, the talks, the TED talks, the books, everything is on how do you raise money? Mostly the foundation was tech 'cause that's what happened for them. Most of the venture money is in tech.

5:55 You have one venture playbook and it doesn't apply to climate. Climate tastes more like health care and real estate in how long it takes to get something up, how much more money it needs.

6:10 They're not identical, but they taste more like it. And they're all in infrastructure, like we're talking about real estate, that's what it is. And with health tech, it's the long life cycles,

6:23 right? The funding cycle, it's not the life cycles, but the all the funding cycle, the size and the uncertainty because it's all untested. A lot more folk things, first of kind. So very

6:39 different. They need their own playbook. It's a different financing stack. Like real estate is usually stacked to get a project, a building up. It's just not, I have six billion dollars to put

6:48 this building up or whatever, right? It's, there's debt, there's equity, there's various forms of how you. put it all together, just sometimes tax credits. You can even look at the movie

6:58 industry of how they put something together. You're literally putting a billion dollars into a Marvel film on just the belief that this will be good, right? So there's other industries that you can

7:09 look to for guidance, but luckily climate has been around for a long time. This is not the first time monies come in. It came in in the 90s, everyone was too early then. A lot of the

7:19 infrastructure wasn't there. We're at the right time now A lot of the foundational parts are here. And people are interested. We're not trying to teach people that climate doesn't exist. They see

7:31 it now. In fact, we've passed the point of no return, right? The 15 degrees everyone was talking about forever. We passed it in February. Yeah, it's gonna be number so hard. So now we really

7:40 broke the glass and I hope we can put it back to get, we still have a little window. But we're the last generation to do something about it. That means a lot. So the kids that are like five years

7:51 old who wanna do something, it'll be past their time, we're literally at the perfect time, we have the resources, we have the solutions, we just need to scale them now. It's not playing with RD,

8:01 it's, let's deploy and getting as much of that out there now. Yeah, so

8:10 you kind of feeling that sense of urgency and then your experience as an investor, because really how do you help these projects take off is make sure that they have access to funding? Yes, getting

8:22 the funding together, it's all about money right now and deploying. And, you know, and you mentioned, you know, the VC playbook, which has really evolved and matured

8:32 during the past two, three decades of digital innovation, doesn't quite apply. What do you think will be the role of venture capital for climate tech? There is a role and also for certain

8:46 companies So A, yes, there is still a role in the early stage, right? In the later stage, if it's proven. And if it's able to make money, you don't need to keep taking equity dollars. It's too

8:58 expensive. You can get cheaper money. Debt is way cheaper. And so maybe you don't need series BCDEF, maybe, or less, I don't know. I don't know how much money they need to get to a point of

9:12 revenue or profitability. It depends on the sector. Climate is so wide. It's not like tech. Tech, foundationally, they're all very similar. There's code You go sell it either to consumers or to

9:23 enterprise and then there's a series of steps you take. Climate, there's nuclear, there's natural science. There's all sorts of things. There's food. You can go down any roads. And that's kind

9:35 of one takeaway I had early on, which is the fire hose is too big. I can't look at everything. Let me pick a lane. So I specifically picked decarbonization. What can we do to remove CO2 at large

9:48 scale? how can solve that big problem versus every problem, right? back to

9:55 VC, I have a lot of colleagues who also shifted from tech into climate. And so the closest to them would be software. So they invest in software solutions and climate. Well, this doesn't really

10:08 solve the problem. You're playing in the sector, but the problem is CO2 being emitted from heat sources and chimneys, burning things, software doesn't do anything How do you remove CO2 emissions

10:24 from that? This is infrastructure and throwing a billion dollars of software at it doesn't really help. There's a lot of analytic tools. The most interesting in the software play could be like

10:42 energy plants, these, yeah. So that's - Like efficiency type of stuff. Yeah, I don't really see it. You sure, you can find ways to save energy.

10:53 the modeling or the analytics is kind of peripheral. It's not the driver. It's not the driver. You need real hard science, right? Chemistry, biology, physics.

11:04 But so that's one point on where VCs are coming in and the other is they're coming in early, which helps.

11:13 Are they really coming in early? Because most VCs - There's not as many as tech, okay? So again, remember traditionally, this sector of venture capital was in tech. And so it's just a template

11:25 by which new funds and climate isn't being set up. But there's a lot more, but the amount of groups is nowhere near as large as tech. But I think there's starting to be a transition globally. So

11:39 US dominated a lot of venture capital for tech. But I think in climate, I'm seeing a lot more activity in Europe. There are foundations with a lot of money There are, you know, governments have

11:51 participating

11:54 You have different banks and debt funds, royalty funds that are taking their returns back as a royalty play. There's just different forms of capital, which makes it more interesting, but also

12:09 maybe harder for some of the companies to navigate. Because you can't run the playbook. You literally have to own debt as you go along. Well, no, you have to find all these people. It's kind of

12:18 like the beginning of tech, when no one knew where everything was And back then, there was not even a LinkedIn to have it all aggregated or a crunch base or anything. Right. So you had to find all

12:28 of these, meeting them one at a time. So the big conferences like COP or Climate Weeks help as a place to identify them. And

12:40 you kind of have to also have finance people involved to learn how to put them all together to financial projects in various stages Then there's a whole thing around credits, both carbon credits and

12:52 tax credits. how do you leverage them as part of your stack? And then how you incorporate insurance into all of this to make it safer for investors. 'Cause now the first wave of climate investors

13:06 came in because they believed in it, it's almost philanthropic or purpose driven, and they lost a lot of their money. Now it's more institutionalized and they really want to return And so it's not

13:22 just, can't sell them on the vision completely. And I don't see a lot of them having revenue models or a lot of them depend on carbon the And. credit credits

13:32 market isn't completely stable, there's not enough to go around. The credit services are usually pretty small. So it's just another ingredient. And I think a lot of these companies really need to

13:45 focus on how do they make money? This is no longer from having been in the mud and getting my hands dirty. This is not a climate problem, it's a finance problem. So I wanna dig into that. So one

13:58 of the things that I, I don't wanna say critical of when I see an early-stage company, they meet a founder who doesn't understand finance, and they'll say, I need a CFO. And then you ask them,

14:06 What does that mean? You're shaking your head, and a lot of times a founder will describe what I would consider a bean-counting CFO, which is not what you need, not what you're describing. And so

14:15 maybe you could share some wisdom on what is a finance person, 'cause I don't think I would be able to articulate what they bring to the table And when you need someone like that on the team, like

14:25 is that, in some ways it sounds like you need that right at the beginning in terms of skillset or knowledge, maybe not part of the full team. Yeah. But you know, go ahead and share what you've

14:33 seen. So it understands a lot of the audience on this podcast are founders. Founders, yeah. So a finance person doesn't mean CFO. They're different. Okay. And there's nuance to all of this.

14:45 When you're in the beginning, you don't need a CFO.

14:49 There's no financials, it's all zero and imaginary, right? So you don't need that just yet, it's not that sophisticated. Also, just because someone else had the title CFO, somewhere doesn't

15:01 mean it's appropriate for you. A lot of the, if you just went even one on LinkedIn, they're not in climate. They're probably, if they're even gonna touch you as a startup, they probably came

15:10 from tech.

15:15 It's not the same. Maybe they've never done project finance. Maybe they don't understand what carbon credits are. Maybe they don't understand what gold standard vera, the ratings, and they don't

15:20 understand any of that. So, yeah, they might understand money, but they don't understand the sector enough to participate in a meaningful way. You wanna find, it's almost like, if you're

15:20 looking for a picture in a baseball game, wanna find someone who's pitched a major league game. You don't need a first baseman. Yes, they all play baseball, right? And so, at the

15:42 time of what you need, you need someone, when I say finance person, Someone understands the breadth of the different products. and what's out there in climate for you and to help you put all of

15:55 that together, which may mean if you're not, as a founder, good

16:02 speaking debt and speaking equity are two different things. And most founders speak product and vision. And even in the tech world, they very rarely speak revenue, exit, MA, like they don't

16:14 speak that, the tail end of the story, which is what investors care about And so even then, there's a disconnect. And so when I say finance, it's, do you understand what's out there and how to

16:27 put it together? At some point, once you get your financing in place, you're gonna need more. Oh yeah. Then you're gonna need a CFO to help manage the different types of funding you have to get

16:40 more project finance, to leverage the carbon markets. And even then, that person might need VPs below them. or help below them, advisors below them, to manage each of these components, which

16:53 all big companies have. You know, they're almost little specialties, and you're gonna need specialists in each of these areas. You might need commodity traders, right? And the CFO will know

17:03 enough to how to manage it all, but maybe it has never traded commodities, but has done project finance. Actually, if you're doing project finance, are really good lawyers what you need, because

17:13 you're gonna have a 200 page contract, and the really good project finance lawyer, that's all they do, can handle the business and the finance component, right? And there's lots of this exists in

17:25 Houston. These specialists are all here. In fact, everyone else doing climate projects around the country should come

17:46 to Houston for resources. Like, Houston speaks the language way better, because energy is - So what are you used to doing? Yeah. Big projects, right? These kind of things. Yeah. SF doesn't.

17:47 Mm-hmm. They'll have the tech CFOs, the tech finance folks But I think Houston's unique in that.

17:50 I mean, because Houston has these project finance people who've been working on these big projects for many decades, but how do they then transition into working with climate? So here's an

18:01 interesting thing. I think we've been calling it all the wrong thing, and maybe that's why a lot of people are standoffish or whatever, and maybe they don't see the current opportunity. The people

18:12 who are in it do, and I think maybe redefining it could help more come in, which is

18:18 throughout the history of time, there's been new technologies that have come out that have changed everything, right? So transportation, everyone's riding horses, and there was a car in the train

18:30 in the plane, and it's like, you either hop on board and do it, because now it's here, just how do you spread it, right? And if you were the guy who sold horses, you either moved or died It's

18:42 going to go or leave you behind, and every time it happened, those who came on board. I mean, lots of money, okay? So when the internet came, you can say, I don't know what's important about

18:52 the internet, but, oh my God, everyone got on board. I made lots of money and huge transition. Lots of capitals put into these things. Entire industries are like, you can see the world change,

19:04 right? We're now in the age of the internet. And now probably AI, and you can drop on board and all of that, right? We're currently, it's not a climate thing. We're in an energy transition

19:15 We're using Stone Age tech of digging things up and burning it, very inefficient. We're about to move into a modern age of energy. And we're at the beginning of that, kind of like 1990s for the

19:28 internet. Yeah, slow and there's dial up. And now we're at fiber and satellite from the high speed internet and the plane, right? About to with Starlink and all of that. So energy's the same

19:42 They shouldn't think about this as a climate thing.

19:46 So that's something we've got right here in Houston is we use the energy transition language. Yes. A lot more than the flame language. Think about it, like if you're digging out of the ground,

19:56 you have to transfer this oil or coal or whatever to from one place to another, and then you have to keep digging and transferring and burning and all this, or I put a solar panel out there, the

20:08 sun hits it, it creates energy. And as you do more of, it's cheaper and cheaper and cheaper, right? So if mine is cheaper than yours, I'm going to beat you. And the economics itself, I'm

20:19 telling you, this is a money thing, it's not a climate thing, the economics will lead to the transition. The plane will get you from New York to San Francisco, faster than your horse, and people

20:29 will pay me

20:31 money to ride my plane, right? Just like there's a new plane that'll take me from New York to Sydney in three hours, right? People will start paying for that and that will grow. These are what

20:41 leads to transition. And there's an energy transition coming.

20:46 moving in this direction, and that's not going to stop. There's just cheaper ways of doing it.

20:53 Keep in ways that are also not polluting the environment. Yeah, it's almost irrelevant. That's almost - Because the thing is, we could come up with cheaper ways, but then they could be dirtier.

21:06 Well, that means it probably costs more to do it anyway. You're not covering it over the cost, right? And what I'm trying to say is it's not - You include the cost. The pollution is not the thing

21:14 It's a great, it's great that - It's an added benefit. Yes, it's an added benefit. And that's how I think climbing people should think about this. The things that'll win are the things that are

21:24 intrinsically cheaper, better, higher - Yeah, think about it. Okay, so all these climate deniers, okay, fine. Who cares? Earth is spinning different and that's why there's 17 more hurricanes

21:35 in Florida. Okay, but -

21:39 That's very controversial state. We should be 18, 18 hurricane - Whatever, whatever It doesn't even matter what you believe, just that. Insurance is no longer gonna pay for the house that is

21:47 destroyed. Yes, the man. And so now you will not rebuild there because now it's on you, the risk is on you. Yeah, you can no longer insure. Right. 'Cause now in the insurance companies, like

21:56 while the risk is high because of calculations of this happening again and high. So if I insure your house, I'm gonna lose again. 'Cause insurance companies make money by not having to pay money.

22:06 Yeah. So if they have to pay a lot, they're gonna go bankrupt. And so a lot have, right? So insurance, believe it or not, is how all of this is gonna pan out And I'm telling you, this is a

22:16 money game. We don't have to talk climate, we just have to talk money. Because eventually the impacts of that pollution or whatever that CO2 that we're emitting is gonna pan out in money terms.

22:29 Yes. In terms of whether we have to pay for more insurance or higher health costs, 'cause you know, our air is not good quality anymore, we can't wait properly. So if you want solutions to be

22:39 deployed in more places, you need more money. That money is not venture capital Talking about what, 70 billion? in all, accounting, the life sciences, the tech, all venture, it's like70

22:50 billion, right? You're gonna need trillions. That asset class is not gonna get you there. And it's the most expensive. You're gonna need banks, you're gonna need debt, you're gonna need all

22:58 these other forms. And that's a very different language. I think a lot of these founders do not understand.

23:06 And it's all about money. I can even run back, I don't know. Well, how are you gonna mitigate the risk? I don't know, what risk? You don't even know, right? So you need a whole different

23:15 language as not taught or very little, I think. It's not taught. No, I mean, it's true. I mean, you can go get a PhD and create these great climate tech solutions. But it's not even taught in

23:26 the accelerators, I think, part of the challenge. 'Cause all the acceleration programs are focused on how do you build a tech company? A tech company, they'll tell you about VC. Yeah, or seek

23:33 an in-out-raising. They're playing off of a 20-year playbook, and we're now we're in 2024 at the advantage of this wish. And also, there's a lot more of these now A lot more project finance that

23:44 have shifted from different. infrastructure projects to hear. Actually, I find that real estate investors and real estate people understand this more because they're used to having projects where

23:57 you need to get licenses in order to move forward. You might not even see a dollar for another three years because you have to get the building up and there's complexity in how you put a building

24:06 together. Are you ready to lead the decarbonization charge? Energy Technics is your platform for growth, offering unique resources and expertise for energy and carbon

24:12 tech founders. Join us at energytechnexuscom and start building your Thunderlisset. Do we want to talk about carbon optimal? Sure. Tell us about what it is. Tell us about how you got into it and

24:12 tell us that story and then exactly what is it that you

24:33 guys do. So I spent, when I first got into the space, I spent a lot of time looking at deals. I told all my investors, send me deals. I want to look at get some deals. So I looked at all the

24:43 deals and a lot of them were too early. It's like, ah, my goal was, my thesis was I have two, two big bullet points. One, I'm gonna pick one problem, solve it. I'm not trying to bet on 17

24:57 horses, wanna solve the problem. So through that lens, and I want it to go now, right? I can't have, well, you know, if you had another, you know, 2 million, then we can do five more years

25:10 of RD, like, nah, like can we put in the ground now to absorb CO2? What is that solution? I don't know. So I looked at a bunch of deals, it took me a long time, and I came across this one and

25:22 it just checked all the boxes. Did diligence invested during the board? And what this company does, it hits what I was talking about before, which solves a problem, but also makes finance, makes

25:35 money, profits. And so it essentially is growing algae in a photobiary actor tank What that means is all the ingredients are inside this tank. the light, the nutrients, the water, and the CO2,

25:49 which are needed to grow any plant that you've ever seen, trees, grass, bushes, all of things. And so it's in a contained ecosystem, completely monitored, measured, adapted for. So this algae

26:02 grows very nicely and very quickly in high volume. And it's actually one of the fastest growing plants that we have out there, which you need because the faster it grows, the more CO2 absorbs And

26:13 so what we do is we put this next to the polluting sources. So the biggest polluting sources are coal powered energy, cement steel. These are big industries burning coal or various forms of fossil

26:28 fuels for a heat to process either energy or power on the grid or melting metal, grating cement

26:40 So we put the next to these facilities and they already are piping the. gases out, so we just redirect the gases, we parse out anything we don't want, and we make it just the CO2, pop it into our

26:54 tanks, and the CO2 is gone. The algae will take it up. Absorb it, eat it, gone. Okay, now you have clean coal. The coal facility can exist until solar is everywhere, wind is everywhere, some

27:07 other solution is everywhere, fusion is everywhere, whatever, right? And then the older tech, the horse will go away in lieu of the plane. And then the plane eventually will go away and lieu of

27:18 something else. Technology keeps moving forward. And so what this technology does is it uses plants to absorb CO2, very simple science, eighth grade biology level. Okay. And then what we do is

27:28 we empty, it's a great solution. How do you make money? We empty the tank, which you grow all this algae and you empty, it's called biomass. You process it

27:39 into a variety of commodities.

27:44 Oil is one. Texas loves oil, we can make oil the same way earth made oil, we can make it in 24 hours, right? And this science is also well studied. Everyone knows this and actually every oil and

27:54 gas company has had an algae department making trying to make oil, right? Then we can also make fertilizer and sell that. We can also make food components and nutraceutical and vitamin components

28:04 and sell that. All of this makes it extremely profitable, multiples more than the cost to make the algae And so it becomes a very, very profitable endeavor while also cleaning all of the CO2. And

28:18 quickly, it's quick, it's cheap, it's easy, and it's profitable very quickly. So it has a lot of components that makes people think that this is like too good to be true, but literally it's

28:28 trifecta. But you know what it is? We just copied nature. That's why it's so efficient. You don't have to come up with science. We're just harnessing how the ocean works, and the ocean has been

28:41 removing one third of the global CO2 emissions this whole time. We've maxed it out though. It's like a nature-based solution. We've copied it and used tanks. And used tanks. Almost like vertical

28:53 farming. So traditionally, Algis, we've been doing this for decades. This is not new. Growing algae is not new. You can just dig a hole in your backyard to have some algae right away, right?

29:01 They've been doing it in a pond. You know, back to you. All the time. All the time, all the time.

29:06 Right? So it grows in a pond. Everyone's been growing in a pond. The problem of the pond in using the sun is that the sun is not 247. The pond is horizontal So if you want a lot more of the stuff,

29:16 you're gonna need a lot more land. You need like surface area to the face of the air. So too much land is not efficient. Also, sun is not efficient because yesterday was cloudy and there's no sun.

29:25 So if there's no sun, it's not growing. If not growing, it's not absorbing CO2, right? And also you don't get enough product to make it profitable. So in the end, even if you had enough land,

29:35 you still have to make money. So you have to harness enough of this product. And also having it outside is inconsistent, has a lot of contamination. And so if you're doing it in a tank, we're

29:44 making pharmaceutical grade algae. We don't need a lot of land. We only 80 tanks can fit on one acre. So we're working with a facility, a coal powered energy plant in the Midwest, emits 9 million

29:56 tons of CO2. We can clean it with 50 acres of land. And your ears may sound like us a lot, but in the context of things, it's not. And even if it was, every acre is producing revenue

30:10 So 9 million tons of CO2 is what you're able to capture. And then more. Yeah, and more. Because every partnership we have, we have this coal power, we have partnered with cement factories, they

30:22 don't have one, they have many. Yeah, that's a lot. 'Cause I mean, so I started off my career working with carbon capture and storage. And in the group that I was part of, they were very much

30:33 like, storage is the solution, not utilization. And their argument is really because you can't do it the skill that we need. Can. utilization. And I guess this was more than a decade ago and a

30:44 lot has changed. In terms of like, I guess their argument was the amount of energy it requires to capture CO2 and actually then make it into some like utilized products. If you're using direct air

30:55 capture, yeah. So anyone who says camp hasn't looked at all options. I don't believe in the word can't. Maybe you just haven't seen it yet. You haven't seen everything. And maybe I found this

31:05 because I was curious. I was willing to listen and hear all of the steps and months of asking questions before I realized, Oh my God, this is it. Because it sounds very much like recycling

31:20 anything, right? Because it's like taking CO2 that comes from coal that over billions of years has become coal, which was biomass before. And then you recycle it in the tank and make it back into

31:32 algae. It's like circularity. And then you make it into products and then you, you know, make it into oil and then back. One of the biggest things everyone needs right now. is fertilizer. So

31:42 because of the Russia war, they're out and they're the largest producer of fertilizer. The whole world has a fertilizer shortage. So why not make something everyone needs anyway? And then there's

31:52 the group of that says, well, this has to be stored and, you know, like fine. If you want, give me a contract for biochar. I'll turn it to biochar, which has a hundred year permanence. Fine,

32:04 right? And the beauty of, and then there's all these like, but what if, what if, what if The awesome part about this project is that we're sitting right next to a heat source, a cold powered

32:14 energy plant, or a cement factor. The, the food gas and the heat is already there. The excess heat could be used to make the biochar. So all the places I needed energy, this particular project

32:26 already has it built in by recycling and reusing what's already there. You could turn it into useful things. And that has value. Commodities are very, and also very easily tradable. They're

32:36 tradable exchanges You can either get contracts or now. Get your finance guide together, figure out how to trade commodities, figure out how to trade carbon credits. Each of these is

32:46 specialty. And I guess the way carbon optimum is then running it, 'cause you could be a company that just provides you with the technology, but it seems like they're running it as a project, it's

32:56 a project company. Yes. So selling projects, not just selling a technology and then someone else takes care of the utilization. You can, people can license a tech. I think that will happen later

33:07 We're likely to do it with governments because we can, with this, think about it, you can make a country energy independent. I can produce, watch this. I'll give you a use case right now. We

33:20 have a cement factory on an island. I absorb all that is CO2. Now they're completely neutral, right? Met the power's agreement. Hey. I then grow the biomass to turn it into a biofuel that then

33:32 powers all the generators on the island and all the missions from the generators capture again to turn into the biofuel. Now it becomes circular. They no longer need to import oil, and now they're

33:42 energy independent. I don't have to make oil, I can make fertilizer. Now they have the ability to make food. Algae is also food. So in parts of the world where they're food insecure or they can't

33:53 grow because they're in a desert or something, it grows in a tank, it is location agnostic, and now you have food from the algae. The biggest food companies have an increasing their patent

34:06 portfolio of algae products, of food that you can make from algae, because they know that there is a shortage of food globally, this is really cheap to make, and it's highly nutrient rich, so 25

34:19 grams of this, powderized, if you just absorb it, is all the nutrients you need for the day, really efficient. And maybe that's not your lunch, but if you're going to die - If you need it, you

34:30 can be your lunch, yes. This could keep you going, right? So there's a lot of benefits from this plant that's been well, well studied over the years.

34:40 is just we have tech that makes it grow more efficiently, faster and more. Is it a matter of like, there's a tipping point where that yield

34:53 makes it profitable? I guess my question is, what's different this time around? 'Cause I'll be honest, I remember in high school, college, one of my buddies also was working on like a algae

35:03 reactor, and this is at Georgia Tech. And

35:09 it was a capstone project I wasn't necessarily going to go anywhere. So it's clear that people have been exploring it before. And so the question is, what in the technology has flipped that makes

35:18 this viable today? I'll say we have not seen another one that does it this way. But who knows, maybe I haven't seen it, but maybe - I guess what I'm seeing that's different is like the scalability.

35:29 Scalability is just more money. There is a tech difference. Your buddy, a bet, without having asked Any more questions? He was using sunlight still. Suddenly I don't remember because it's the

35:42 cheapest easiest you know you get you're doing it for a school project you'll have the time to invent a new piece of tech this took ten years and fifty million dollars to get here this wasn't like

35:50 some really quick thing and most companies groups scientists that are trying to grow algae are using sunlight which is as you know is not up all day okay and even if it is up all day up in Sweden half

36:10 the year it will not be your rights you're not getting full and sunlight is the key everything else you can control for right but sunlight you cannot and so I guarantee you there that he was doing a

36:25 closed system got it so this is fully close with this is the closest one and you don't need sunlight we do we are using artificial light so we're using Ellie delights to power insight we have twenty

36:35 four seven so we will have a twenty four seven grow know you've tripled your throughput And also there's other tech that because we can do it this way, because of the way we deliver the light, we

36:46 can do it in larger tanks. So most people using sunlight, even if they were using it, they're using it in a way that the tank was smaller, thinner, because the light can't penetrate through

36:58 density. There's a lot of problems that you have to dress to grow it this way. That has ability to be covered. And not only did they do it, they already had a pilot facility up running and produce

37:10 the oil and burned it. So you can actually make oil out of a tank instead of digging out of a ground, shipping across oceans, spilling it, cleaning it. Then like all of that doesn't have to

37:26 happen. And it could be done at the similar cost.

37:32 And what do you think, you know, when you joined the company, how long has the company been around? And then what did you think? What are some of the pivots maybe you had to make or do things

37:41 differently that made it successful but still running still going where we have not dropped tanks everywhere yet so it's been around for ten years and the thing to learn is this financing component

37:56 finding where all the money comes from partnering with different groups figure out how to do those contracts and those negotiations with polluters with off takers with Fi it's a complicated and then

38:07 globally so in different countries in Europe and US Middle East and Asia

38:13 all of that has to be done so if you're just doing for money you can focus on one country and exit if you want to solve the problem you have to be everywhere in fact if you really want to solve this

38:23 problem for real you need to be in Us and China are the two biggest polluters til You Guys going to China I can't say More Yeah I'm also talk about things already happen Yeah I know but that's that's

38:42 that's good and it's good to know that and that you're making such rapid progress on this talk a little bit about your role as a board member Yeah I'm a little different because I didn't come in here

38:57 because I wanted to invest in things I wanted came in because I wanted to a read a book that was like holy shit I'm going to die so I'm like i Gotta do something about it that was my initial spark so

39:08 My Spark as I want to fix this I want to do something some more active specifically in things that will work I believe this will work I think it is a game changer across sectors every industry that it

39:22 touches or touches oil and energy it touches food and AG touches C O two removal touches can create new finance products International trade like it's just fascinating what's happening and I want to

39:38 help. There's so much happening. They need the help So I was like happy to chip in right and you don't have to pay me. So I'm like free help

39:46 And I have a network. Let me tap it. Let me Make it useful

39:53 Every step of a deal takes lots of meetings and there's only so many hours in a day for anyone to do that you're gonna need a lot of bodies to

40:01 Have all those conversations Do you think um Climate startups or energy transition startups or more hard tech companies need more board members like that who are more proactive It's not need they need

40:16 more humans that they can help Board members are not their job is not to do all this. Mm-hmm. You know, they're supposed to guide And vote on key decisions They're not supposed to work normally

40:29 they don't I'm unusual in that I want to because I believe in it. Well, I guess the question is different is,

40:41 I guess when you're choosing a board, like, yes, the board has a fiduciary responsibility. They're supposed to protect the balance sheet in some ways. But like, how do you activate the people in

40:50 a position to help who may not be like traditional staff? Maybe it was the way to think about it. People can go above and beyond Is that a matter of like putting together an advisory board or how do

41:00 you see it successful? So there's two things, it's time or money. Yeah. You pick, right? So if you're not gonna pay someone and you want them to help you, you as a founder, CEO, whoever is

41:11 doing the convincing needs to be able to convince them and then convince them every day, every week, every month. So in exchange for, I don't know, 10, 000 a month paying salary to someone to do

41:22 ex-work, you have to maybe give up four hours a month per person to motivate. Yeah, yeah. creating the scale that you need. That's not scalable. No, no, no, like for you as a founder, like

41:35 in order to, you either have to pay or you have to buy. There's only two currencies to get people money or time. So you're gonna give your time or you can give your money to get someone to do

41:44 something. 'Cause if you just, let's say you convince someone one time and you never talk to them again for months. They'll fade away, they'll forgot about them. They'll move on to something new.

41:52 Right, so you gotta have to tap them on the right. That's gonna take you an hour of your time. Let's say an hour each week to catch up with someone to have coffee with someone. How many of those

42:01 can you have on top of your regular work, right? And then can you keep them motivated, you know? As things are progressing or not progressing, or if you need them to help and not help or if

42:11 you're not compensated or you give them equity. I don't know how you're gonna, it's just, you're gonna, as having been an operator, you're gonna give either your time or your money. Yeah, I

42:20 mean, bringing on anybody, like we try to bring on people at Energy Tech Nexus, it requires time, right? requires time to. not only get them motivated, but get them up to speed on where you are,

42:31 and to set them in the direction in which they could actually be valuable for you. But I guess the point is that there are many other people like you who have a lot of skill sets that would be really

42:43 valuable to these companies. And how do we, so it's really up to the founders to figure out, you know, how do you kind of tap into that asset that is available, these people with decades of

42:57 experience in maybe perhaps project finance. And that's the skill set that, or they have a really good network and that's the skill set that you need. So you don't have to hire them, but either as

43:07 an advisory board or as a board member, how do you get them to help you make your business successful? If a CEO needs me to tell them that, it's not going to work for him Well, I think there's

43:20 something we talk about. How do I make friends? I don't think you can be able to make any friends if you need me to tell you how to make friends.

43:27 but it's also like realizing that you know it's not always about just hiring the right people but it's using your network in the right way eventually want them on board someone's really good the only

43:36 reason why you don't pay someone because you'll have the money for it right but also getting someone highly motivated to help you with or without money is the skill of your yes that that's part of

43:48 like creating the future this is how we get from Gotta be people person yet you'd better have has friends you'd better be able to motivate them if you need to teach me how to motivate you're not gonna

43:57 be able to motivate at all yeah that's right and that's super hard it's these are personality skills or just

44:06 if if you're if you're putting a baseball team together and someone's like how you hit the ball not going to be helpful right there might be a good catcher teach you but by the time he finished too

44:15 late right now so it's not worth the time because you know it's not even not worth the time if you have to teach a founder how to do these basic things That person should probably be the chief science

44:27 officer and find a different leader to manage the team to be able to build these things. 'Cause I

44:36 see this a lot, actually. It's about communication, right? How do you tell your story effectively that gets people excited? That's the art of storytelling. Not everyone knows how to do that.

44:51 Yeah. It's so that they can kind of self-motivate themselves to do the things that's needed to do. Well, I think it's a self-truck. They still need to be inspired and motivated and driven to find

45:02 a vision, right? The difference between someone being, knowing how to do something and then helping you to do it. Two different things. Or doing it for a month or six months or a year, very

45:11 different. Why should I help you for a year?

45:17 So on a different note, so you are based out of New York, have spent most of your career there, I gather, have now been coming to Houston quite a bit for carbon optimum. What do you see are some

45:30 of the differences in how our climate tech ecosystem is set up here? What might be missing and what we're doing well?

45:41 I think Houston has an opportunity to be at the epicenter of this new transition more than any other city. You have all the resources here and you guys have already started putting these communities

45:54 together I see a lot of parallels between the start of this and the start of tech ecosystems I've seen in San Francisco and New York when those were happening. And in the beginning, it's a lot of

46:06 education. It's a lot of, let me teach you what others have learned so you don't have to make the same mistakes, okay? But it's not doing a lot of doing. Later, as these communities developed,

46:18 it became doing. And the difference between teaching and doing is

46:23 like having workshops? to teach you how to do something, right? Then having a group of people who will do it for you.

46:33 We don't have time to learn, we have to do it now. So you can do a workshop that teaches people about project finance, and here's six project financers who are ready to help you based on who you

46:43 are. If you have these criteria, these guys will help you. That's a huge leap.

46:50 And if your organization offer the doing part for everyone, it's a huge difference.

46:57 We're starting to see that switch, not necessarily with internal to us, but individuals with a skill set from traditional energy saying, look, I'm available, I wanna help with this. I know how

47:10 to do it, and it's almost a supply constraint where they're having challenges finding the right buyer. 'Cause I think meaning the startup. The startups don't know that they need this for the

47:23 skillset or or don't know how to put their arms around it and so there is this gap where at what we have to educate on you know what what what does it mean to be sophisticated and finance what what

47:34 are you looking for for that kind of staff what is a a project look like and and we're you know people are learning and that they need it and I think a lot of times with any sort of adoption of a new

47:46 way of doing things you know edge like you said education is a big challenge and before someone can buy something they have to know they want it right if they want to buy that service so they want to

47:55 buy that pathway if they don't know they're going to fail exactly and realize that they lost too much time because of the burn rate in early stage companies is what kills them Nora so you don't have a

48:08 Lotta time to just realize things like figure out the meaning of life enough so you if you don't know these are the ingredients wrong CEO that's what this high failure rate you Know also different

48:22 startups have different the different products so their financing will be very different Yeah right if you're growing mushrooms to make fake leather for bags we have those guys on last week it's no

48:36 I'M just kidding it's very common

48:40 thing for a clothing or fashion things I mean there's a huge asterisk on that level that's like if you're doing that or if you're making biofuels or you're using growing plants to clean you know the

48:57 seashore or helping I dunno then every kind of solution is different and that's what makes us all challenging was why I had to pick a lane can't look at everything at once because then you'd literally

49:09 have a different formula for each one and that's what's challenging so as education goes you could start with like here are the big forms of financing that is different than Tech if you start there

49:19 and then here's where these clips comply Maybe you have some case studies right eye but having the resources available so that says okay I want to do that so instead of them having to find it having

49:30 available that's huge right there and those that are in the community here that willing to help

49:37 have you interacted much with start ups from the Houston ecosystem some him any kind of takeaways any insights on like what's happening here worse is like what you see in other parts of the U S while

49:50 the ones here a lot I liked them a lot more of the further along they understand a lot more of one here understands the language I think

49:60 I mean i engage with them for advice and feedback and not all of them are in my one to a very narrow right and and eventually I get into other sectors but like I want to pick one problem solve it pick

50:14 another problem solve it like the next one I want to touches like pee fast and water as amid a bunch of companies there but that's each lane at a time, which is not how everyone else addresses it.

50:25 And that means when I solve it, it could be one company, it could be two. And if that's all it is that it's done, we move on to the next one.

50:34 I think

50:36 more companies from other states will start coming here. If you get some successes out and you don't even need to have an exit, just get a project up is enough, that's huge And if you can align the

50:49 state with strategics, with funding together, there you go. And there's nowhere else that can do it easier than here. I think we should end up with that. Yeah, except for, I wanna talk about,

51:04 Go ahead, I'm gonna get going too. Oh yeah, you need to get going. You know, 'cause you asked like how we met. Yeah, so I met her because she does these dinners called the wow dinners. Wonder

51:15 women dinners. Wonder women dinners, isn't it? well the wonder women dinners founded it Yeah I Dunno why someone's been calling it or I'm going to Wonder why that wasn't there I guess well I Guess

51:29 Wonder Yeah okay so Wonder woman dinner to talk to us a little bit about that and you know talked us a little bit about that concept yeah

51:38 that's how I initially got to houston years ago okay before all this was popular it started with a group of people having dinner invited more friends more friends and then friends would leave New York

51:49 has started New York and now having done these for twenty years it spread to thirty cities there's ten thousand women is completely a whisper network by invitation curated gatherings of exceptional

52:02 humans this great women are just fun badasses funny and it's it encompasses all the ways authentic relationships should be developed through friendship and kindness and liking each other and not

52:20 handshakes and badges and business cards right which is what most networking events are but when you hang out with your girlfriends or hang -ups a bunch of friends that's not we that's not the vibe

52:32 and so that's a very different energy around this and it's been consistent because of the way we and have organized it and all the things I've learned and made mistakes along the way have now learned

52:42 how to make strangers become friends over a course of one dinner breaking bread and then build on that through how the community develops and it's built this huge network of women leaders across the

52:56 country representing every major company that is supportive is kind embracing and that is a very different energy when they gather and then when they meet others in different cities and keep spreading

53:12 on it's own actually it's been terrific We did one sort of a format similar probably not identical in November of last Year I was kind of like an early Detroit prototype Yeah and I think one of the

53:26 challenges that Maybe I don't want to say it's unique to Houston but we switched to a lunchtime format and because Houston is is such a family finally city that we we thought doing dinners was

53:38 actually challenging because kids are so hard to manage I dunno I dunno like if you I mean one of the reasons why we decided to do launch was like you know cause we're doing these monthly and so that

53:49 we can get these women out women's two women together and learn from one another but what I really liked about the Wonder women dinner was really Yeah just those authentic connections and not feeling

53:60 like you have to flaunt who you are but like just be there everyday at the Atlantic just like just be there connect and like you know and and yao is very good at like being like hey don't you know

54:11 talk about like what makes you fun and weird and what's quirky about you Not you know how many medals you won. So thank you for doing that and for bringing that community together I think it's very

54:22 much needed and also you know your passion for what you're doing with carbon optimum. Yeah thank you. Yeah and thank you for coming on the show.