Capital Series: Hampus Jakobsson, Pale Blue Dot

Financial Services

May 24

This episode is part of our new Capital Series hosted by MCJ partner, Jason Jacobs. This series explores a diverse range of capital sources and the individuals who drive them. From family offices and institutional LPs to private equity, government funding, and more, we take a deep dive into the world of capital and its critical role in driving innovation and progress.

Hampus Jakobsson is General Partner at Pale Blue Dot, a seed-stage venture capital firm that backs the most exciting climate tech startups across Europe and the United States.

We were excited for this one because Hampus is a software engineer, turned founder, turned angel investor, turned VC. He also grew up working in areas of more traditional tech that didn't involve climate, and only recently pivoted to devoting all of his professional attention to building a climate investment firm, a story that's relatable to many.

Get connected:
Jason Jacobs
Hampus Jakobsson / Pale Blue Dot
MCJ Podcast / Collective

*You can also reach us via email at info@mcjcollective.com, where we encourage you to share your feedback on episodes and suggestions for future topics or guests.

Episode recorded on April 17, 2023.

In this episode, we cover:

[2:42] An overview of Pale Blue Dot
[5:01] Hampus' feelings about the climate problem and how they've evolved
[9:19] The early days of Pale Blue Dot's first fund
[13:08] How Hampus balanced his time getting the first fund closed vs. planting the seed directionally with LPs
[18:14] His strategy and thesis before going to market compared to where Pale Blue Dot is today
[22:43] The firm's approach to the first check vs. follow on
[27:50] Different areas of climate Pale Blue Dot invests in
[31:02] The Pale Blue Dot founder
[35:03] The firm's decision process on potential investments
[43:23] Sector expertise and Pale Blue Dot's diligence process
[52:57] Hampus' thoughts about impact and how Pale Blue Dot measures it
[57:08] Reporting and important metrics
[01:03:24] Pale Blue Dot's geographical footprint
[01:06:31] The firm's mix of LPs
[01:10:19] Hampus' thoughts on the role of fossil fuel companies in the energy transition
[01:19:06] An overview of The Drop conference

Additional resources mentioned in this episode: The Overstory by Richard Powers

Jason Jacobs (00:00:00):
Today on My Climate Journey Capital series, our guest is Hampus Jakobsson, General Partner at Pale Blue Dot.
(00:00:08):
Pale Blue Dot is a seed stage venture capital firm that backs the most exciting climate tech startups across Europe and the United States.
(00:00:16):
I was excited for this one because Hampus is a software engineer, turned founder, turned angel investor, turned VC and he also grew up working in areas of more traditional tech that didn't involve climate, and only recently pivoted to devoting all of his professional attention to building a climate investment firm, a story that's relatable to many.
(00:00:40):
Before we start...
Cody Simms (00:00:42):
I'm Cody Simms.
Yin Lu (00:00:43):
I'm Yin Lu.
Jason Jacobs (00:00:44):
And I'm Jason Jacobs. And welcome to My Climate Journey.
Yin Lu (00:00:51):
This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (00:00:56):
In this podcast, we traverse disciplines, industries, and opinions, to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help.
Jason Jacobs (00:01:09):
Okay, Hampus Jakobsson, welcome to the show.
Hampus Jakobsson (00:01:12):
Thanks a lot for having me.
Jason Jacobs (00:01:13):
So it's fun, just before we started hitting record, we were trying to figure it out and we still don't have answers, but neither of us can remember exactly who put us in touch. But one thing I think we both know is that it was before Pale Blue Dot was alive and it was before MCJ Collective was alive, but yet both of us had kind of turned a corner and decided that climate was where we were going to spend our next chapters. Does that jive with you, too?
Hampus Jakobsson (00:01:39):
Yeah, I feel we were two entrepreneurs lost in the dark, figuring out that we want to spend the rest of our life and time in climate and then we were trying... I think we both had come to [inaudible 00:01:49].
Jason Jacobs (00:01:49):
You were like the European me and I was the North American you.
Hampus Jakobsson (00:01:52):
Yeah, exactly. I think that's true. That's right. I think I remember our first conversations were about starting funds and that was kind of where we started.
Jason Jacobs (00:02:00):
Well, I have to say, I'm just so impressed with... I mean, essentially, you've done everything you said you would do so far. And in this world of big, bold statements and under delivery, doing what you say counts for a lot. So, congrats.
Hampus Jakobsson (00:02:19):
Thanks. I think that's the benefit of being a Scandinavian. I think Scandinavia is like under-promise, over-deliver. Whoever bought an IKEA furniture feels that like, wow, it still works. It's four years in, it still works. That's crazy. It's like this shelf is really a shelf. So yeah, I think that's built into Scandinavianess, but yeah.
Jason Jacobs (00:02:35):
Well, before we get too far down the path, Hampus, what is Pale Blue Dot? Obviously, for anyone that doesn't know.
Hampus Jakobsson (00:02:42):
No, exactly. The majority of the world, of course, they don't know, right?So, Pale Blue Dot is a completely normal venture fund, but that only invests in sort of that we think scalably can solve the climate crisis. When we started the fund, I think one of the headaches we found, I was at another fund then, which I really loved. But I think the headache is, I almost felt that I think people feel if they go to another country and they taste the food and they don't have as much salt in that country as they have in yours or something, I'm just like, you eat the food and it just doesn't do it for you. It's good. You can look at the food, but it doesn't do it.
(00:03:16):
So I was meeting cancer curing startups or amazing decentralized way of doing X, Y, Z or something and they just didn't have the salt. They had everything on the dish. It looked great but I just didn't get that spark. And this was late 2018, early 2019. And then I met that random company working on climate somewhere or another, back in 2019, and it just felt a jolt. I was like, wow. This is what it should be and then I just realized that, shit, I actually don't want to spend any more time investing in any other company who isn't actually trying to solve this crisis. And I think that's kind of how it felt for me.
(00:03:50):
And I think Heidi and Joel coming in, my two co-GPs, they came in from other directions, but very similarly, I think none of us had a degree in environmental science. I think all of us built companies before and I think it just felt suddenly, this is where I'm going to spend as long time as I can in this area because it's the only thing that gives me energy. And not rubber ducking on the highway to read yet another article about temperature predictions or flood predictions because that's kind of how climate change feels. I think that you feel like a victim and an observer and I think it's hard to figure out how you could play an active role.
(00:04:23):
And I think that that's kind of what we suddenly realized, like, "Oh, my God. We've built companies for 10 plus years, individually, and we've invested in companies for whatever it was then, almost 10 years, I guess, individually." I mean, this is the only thing we know. The only thing we know is super early stage companies and investing and then why not take that practice and put it at the climate crisis.
Jason Jacobs (00:04:42):
Now, when you saw this company, was that the first time you had been concerned about climate? Or I guess, walk me through your feelings about the problem and how those evolved over time and intersected with your professional pursuits?
Hampus Jakobsson (00:05:01):
I mean, I come from a family that essentially spends all of their time hiking and my dad is originally a nuclear scientist. My mom was a geneticist. My two older brothers are abstract mathematicians. I lovingly, usually say that they use their bodies to take their brains to meetings. So we kind of spend a lot of time in nature and discussing science and stuff. When I was a kid, I thought I was going to be a mathematician or similar, as rest of my family. And I think that I just always found that, how important just nature and ecosystems are. I mean, it's an amazing feeling. You stop by a creek and you realize you can drink the water or something. It's amazing. And I'd always felt that.
(00:05:36):
But then I think that I just never, ever felt that it would be my profession. Like, never at all. And I think that I just worked alongside it. And it's almost like finding to be able to invest in climate tech, is almost meeting the girl next door. It's like you've lived alongside it for so long, and then suddenly you realize, "Oh, my God. Is it true? Am I allowed to actually spend my time in this?" So I think that's kind of how it came for me, it was that feeling of being alongside it forever. But I think also, as everyone else in this industry, having seen the clean tech bubble, having met all of those companies that work with sock recycling, or with building new solar panels, it just feels like it's not venture. It's not venture. And I think I've told myself that phrase so many times. It's like, "This is not venture."
(00:06:22):
But then when I was at this fund in Berlin, I just felt like the only three things I really care about and get energy from and also get stressed from, are inequality, trust, and climate. Those are the three that I feel like I just get so angry and sad when I feel like people are not realizing those. And I just feel like, can you invest in inequality as a thesis? Maybe you can, but it's maybe how you invest [inaudible 00:06:45], like you're more considerate in thinking about how you do it. Can you invest in trust? Maybe you could. Some kind of decentralized product for X, Y, Z. And then can you invest in climate? And I kind of paused and I felt like maybe you could. Maybe you could.
(00:06:57):
So 2019, I kind of built a big climate tech conference in Berlin for the fund I was at, BlueYard and I was building that event and I was building the event, which was an invite-only, 100 people event. I kind of felt, wow, this is it. These people are every day trying to solve the problem. The people I'm getting to come to the event and speak, they're action biased. They're not talking about percentage, probability of what temperature degree will happen when. They're not talking about how to do least impact, or how to do most impact. They're throwing themselves at the problem and applying themselves in fully trying to solve it. And I just felt so much energy and so much joy in being around these people, whether they were in whatever, academia, startup or anything, I just felt, wow, that's like not observers, but actually throwing themselves into the game, going out on the ice and it's like, how can I do work-
Jason Jacobs (00:07:48):
You're just saying "ice" for me because I'm a big hockey fan.
Hampus Jakobsson (00:07:54):
Thank you. BlackBerry acquired my first company and I think that because I was in the M&A team... There's so many calls that started with people retelling the whole hockey game and I was sitting there, just waiting to get out of how Toronto was doing, and how's the Maple Leafs today? And I felt like, oh, my God, as a Swede, it's like it's... But it was good still.
(00:08:16):
But yeah, no, but I think that's kind of felt... Like I was just admiring and getting energy from everybody on the ice and I was like, that's what I want to do. And that's like what 2019 was all about for me just thinking... Honestly, I think what your podcast does for a lot of people as well, I think a lot of people, they think they would want to work with a climate crisis somewhere, but they think that I'm a lawyer or I'm an accountant or I'm a programmer or I'm a designer and they think that they need a degree in environmental science or something and they can't do anything. And I think I kind of course felt the same. I kind of felt, what can I do? And then suddenly realized the only thing I can do is kind of invest in startups and help early stage founders. That's the thing I spent the last many, many years on and then it just felt like, let's go try. So that's how the trajectory was in the beginning.
Jason Jacobs (00:09:04):
So once you had this aha, then how did things go from there? Because there's so many different ways that one could move forward from that epiphany. How did you move forward?
Hampus Jakobsson (00:09:19):
I think that I'm such a believer in game theory, not macro theory in a sense, macroeconomics or whatever you're going to call it. So I just felt like I prototyped this conference and just felt like let's get them into the room and let's almost fantasy portfolio kind of think about should I invest in that company? Would I invest in that company? And because of the fund I was at, of course we were discussing some of these companies and then it just felt how hard it was to align or if you can invest in any kind of company, you invest in the divorce company, you invest in the social media platform, you invest in the company second I met them from the Skype, two of them have crazy seller metrics, one is scientific and very hard. Of course as a venture fund, you're going to pick the divorce company that's growing to 40% month and month and I just felt, no, no, I don't want to actually want to pick the hard one.
(00:10:04):
So then I kind of talked to my two colleagues, Kiran and Jason appeared we're our amazing people and I said, we got to figure this out. And then Kiran said, maybe you should leave and start a fund. And then I was trying to grapple over that fact because I really enjoyed working there. And then just starting dating with Heidi and Joel more and more my two co-GPs who had worked with in different kind of ways but never in the same boat competed together and never kind of saying we're going to do a fund together. So we started just meeting every week and for lunch and talking through it and picking companies and talking about companies and thesises and what we loved and also how to build funds. We talked about what we dislike and about funds and then we kind of started fundraising October as 2019 and then started the crazy thing of fundraising.
(00:10:48):
And I think in the beginning it was so strange because 2019 September you tell somebody that you're going to start a fund on climate change. I mean it was 50% of the people we talked to said, "Climate change is not real." And the other 50% said, "Yeah, it's real, but you can't invest in it. It's philanthropy and there's nothing, no money to be made." So we started out so strangely when we had this conversation, but then we met a handful of people who said, "This is it, you're onto something. This is, there's going to be a thesis here." And the crazy thing is between October, 2019 and June, 2020 when we did the first dose of the fund, like month by month, not the temperature of course increased in the planet as well. But not only that, we just felt how the shift in the dialogue were from people saying it's not real to suddenly people saying, "They only said can you invest in it? Or they said this is smart."
(00:11:33):
And then it just rolled over to more and more coming in and we did it in little ingenious trick there. I think we did, which I recommend everybody's raising a fund. We wrote an email which essentially why you should not invest in Pale Blue Dot 1. It's our first fund together. It's a some 100 million fund, it's a Euro fund, it's in Sweden. It's like we're going to invest in blah blah, blah. We do like everything. We believe in climate tech. This is what we believe in. And then whenever we got an intro or an everybody pinged us and said, "Hey, I would love to talk to you if you were doing a fund." We just said, "That's great. Thanks a lot Bob. Thanks a lot, Lisa, just before we book a call, here so you know about us" and we send that email no deck, just literally that email and I would say 70% just said, "Oh, thanks. I didn't know there was the first fund."
(00:12:18):
And again, the email said you should probably not invest in Pale Blue Dot 1, right? We said, "So we completely understand if you're not investing in emerging managers." And 70% just said, "No, you're right, we don't. But thanks a lot." Like good, thank you. Which meant that when we came to a call, the 30% who said, "No, I know, can you please just send me a link to book a meeting with you or here's my meeting times." We had a shot at those, which meant that we never had that experience with a lot of GPs have. You go out and kiss 1000 frogs and you travel over the world and you meet a lot of people and you realize the first 10 minutes in you realize this is never going to happen.
(00:12:51):
You only invest in fourth or fifth or eighth funds or whatever. You need a certain number, you need a certain background. It was so good because when we got to the calls people said, "No, I really want to talk about this particular part." So the fundraising was even if it was a lot of work, I think it was very, very interesting because we actually had really interesting dialogues.
Jason Jacobs (00:13:08):
Now I have a lot of questions about the Pale Blue thesis and how you came up with it and how it's evolved over time and things like that. But before we do, just this kind of spurs a question on fundraising 101, which is as an emerging manager heading out for your first fund, how do you balance transactionally spending your time officially to get fund one closed versus planting the seeds directionally with the LPs that want to get to know you over time, that won't be prospects for fund one will but will be important directionally for funds two through N.
Hampus Jakobsson (00:13:39):
I think we kind have told everybody as much as we could. We said we try to give people a very easy out. So we told people when they said, "Hey, we're interested to work with [inaudible 00:13:49] Venture fund or this massive fund of funds or this pension fund or whatever," and you just feel like they do first funds, it's sing [inaudible 00:13:57] and fund of funds. It feels like, I don't think Temasek is going to do fund one in Sweden, but you never know, right? So I think what we told everybody was like shouldn't we talk after first close and it's the same. We send this email, the first email, which is like you probably should [inaudible 00:14:10]. But if they continued, first of all, we didn't travel to any of first meetings at all ever, ever, ever. So we always said let's do a call or a Zoom call.
(00:14:17):
And then we did, we kind of said, "Isn't it easier for us to talk when we've done first close and you see more of the portfolio, see more what we do?" And then you had certain who said, "No, no, we're believers. We love emerging managers, we love this thesis." And we had others who said, "Yeah" and if they give it up that easy, it's obvious that they would've said it later. So I think that we kind of tried to always try to get people to bow out in a nice way and then you really feel that people said, "Don't you think that we get it?" And we're like, "Oh, I'm sorry. No, no, I'm sorry. I just felt like maybe for you, you want to see more logos, you want to see more of our thesis." And they're like, "No, no, no, no, no. We thought a lot about this. We think it is amazing."
(00:14:53):
We're like, okay. So I think that was a, I don't know if you want to call it a tactic, but it was one of those things we saved so much time from both ends. And then after the first closing we started investing and then people kind of saw what invested in, they saw the thesis and they saw kind of how we also believe in the machine of investing not only individual logos, but what's our ticket size, what our shareholding, like how do we do the investment, how do we write the memo, whatever, all of those mechanics about it. And I think they just felt, okay, so you actually do what you said you would do. And then we're like, yeah, yeah, of course that's what we do. And then at second closing we actually got crazy.
(00:15:27):
It was really strange. We got oversubscribed and I think the reason was that we had just pushed so many people to just saying, should we talk in October or should we talk then when we've seen a couple logos. So actually the second closing was nicely enough, easier. And I think it's for everybody, right because the second closing, people see what you do and you have a fund, it's not a new vehicle to set up you. They can do reference call with an existing LP and stuff like that. So I think that was the tactic we used. And I think that the tactic we generally try to use just try to figure out if it's an easy way to get people to say no because if they would say no that easily, they would've said no anyway.
Jason Jacobs (00:16:00):
And what was the target for fund one or what size did you end up at either one?
Hampus Jakobsson (00:16:06):
So the plan was to do €80 million and we end up at 87, but it was one of those where we ended up this with people we wanted. We just felt that every single one in fund one, we have a mix of a couple of big institutional and then we have a long tail of really amazing entrepreneurs or operators. And we enjoyed so much because week by week one of the operators said yes. So somebody says, I'd love to join 500k or I'd love to join 250 or even a million. And at the same time, nothing happened at the big institutions. They said, "Yeah, our typical size is 5 million." We fill out another due diligence questionnaire for them. Nothing happens.
(00:16:43):
So we got the dopamine kicks from the operators. We're like, "Okay, they're moving forward, the number increases." But we also, of course we would never have been able to the close without having the big ones and the big ones, of course, all the operators and all the smaller checks, they of course leaned on somebody being the anchor or somebody being large tickets or somebody doing reference calls and do dividends and everything like that.
(00:17:02):
So I think it was a very nice tandem and I really enjoyed the experience and I think the questions you get from a pension fund versus the question you get from somebody who's run a company, I mean they're amazingly different and I think both are very valid. I mean the operator are not asking about portfolio structures, but I mean they ask about how do you know a founder's good or tell me a founder you really love in the market right now or whatever. Whereas the pension fund is grilling you on how do you handle reserves, do you vote the reserves or do the reserves automatically happen in the [inaudible 00:17:32] round? And we were like, whoa, that's a really good question. So it was very, very good sparring during the fundraise to actually learn from both sides. So that's kind of how it came about.
(00:17:42):
We actually started investing just before the first close, it was a bit scary. We had three companies we were about to invest in and then one of the companies were saying, "We will close, we can't wait." So I signed on it personally with addendum saying that we could transfer this to the fund and we had 60 days to transfer to the fund or I would've to pay it. And it was one of those things where I'd feel like, okay, I had an exit before with my company that, I mean you don't want to do a seed stage deal out of pocket. So it was one of those, I'm happy we closed the fund within 60 days.
Jason Jacobs (00:18:14):
How did you think about strategy thesis, portfolio construction when you first went to market and how consistent is that with where you ended up today or at the culmination of final close?
Hampus Jakobsson (00:18:33):
I think we changed a lot of things. I think we changed a lot of things as we go. I think that we're very much a block and tackle group of people. I think that I usually say that most decisions we do, we kind of jokingly I would say swim with sharks. So what I mean by that is it's as if we've fell off a boat and you see the shore of an island and there are sharks in the water and you can crawl and you can breaststroke. So the first thing you do is you do a couple of breaststrokes to know it your right direction and check at the island. And then you start crawling like crazy and then you pause and you do a couple breaststrokes to make sure you're still in the right direction and then you crawl again. And I think we kind of run the same way that we kind of start discussing how do we think about portfolio construction, how we think about this and it's the good conversation now let's go invest in what we believe in.
(00:19:06):
And then a couple months in we said, "I just met this company, I would want to own 25% of the company, but we can't. I mean that's crazy. We'll mess up the cap, they'll do this and that, but can we do 20? What do we think?" You take a couple breast strokes and have a conversation and then we figure out like, no, no, let's settle for 14. That's probably smart. And then we more crawls. And I think that there were very few course corrections in the [inaudible 00:19:26]. When we started, we kind of said what a lot of funds said, "We said 15% shareholding is probably smart, trying to spend between one and a one and a half million euros." That kind of felt we wanted to be, but then we felt we're a new kid on the block even if we have done a lot of investing high.
(00:19:39):
Joel and I think before starting Pale Blue Dot, I think we'd done 150 angel deals and fun deals and whatever where we had done the practice quite a lot. But at the same time, had we done together, had we done anything climate, a lot of these factors, had we even seed all of them. So we kind of felt we probably need to be a lot more collaborative and the way we think we can be collaborative is by going down to 10% shareholding because then you can split around, like we'll do half, you'll do half or something. And I think the 50% was very compatible with certain kind of funds where they said, "Hey, we can do 4%, 5% that works, right? But those are fewer in the world. So we kind of moved to saying 10% to say let's be able to split it within their seed fund.
(00:20:17):
And I think it was very good for us because we learned a lot from where that is a good idea and when it's a bad idea. And one thing we also did in the beginning, which we've changed our mind on is previously we also did pre-seed rounds when we were okay with taking sub 10%. So we said, okay, we did a deal 6%, that's fine, that's, we'll just buy more in the seed round. But the problem is when that happens, it's so hard to buy more in that seed round. The dynamic is so weird. You come in and you want not on your [inaudible 00:20:45], you want to get up to 10% now. So it is a great signal for the lead, but the lead might not get their target shareholding. So the lead is saying, "No, no, no, we need 20." And we say, "Well are you okay with 16 because we need to buy another 4%." Most leads that are very bullish and the companies say, "No, no, no, no, no, we want 20%."
(00:21:01):
And also do you have problems like the founders have worked with you for a year, two years or six months or three months, whatever, and now you need to tell them that you're going to be super valued from some of them in next round or the next round or the next round. And some companies they just believe it and some companies say, "Yeah, I mean this new fund that we fell in love with, we want to make sure that they're incentivized maximally right to help us. So it becomes a bit of a strange dynamic. And I think that the other thing that also happens is if you happen to hit one of those amazing companies, the pre-seed round might not be super expensive, but the seed round sure is. So we had some companies where we looked at the average price to get that seed and we said, "Holy shit, this was an expensive seed round."
(00:21:42):
And it was a strange thing is that's of course if we did the seed, we wouldn't even higher price because of course we got the pre-seed price part of it. But the thing is why didn't we take our full shareholding in the pre-seed round? You spend another 250K to get to 10%, why are you cheap on the 250 and spend only 500, we can spend 750 or whatever. So that's the thing we really changed and said no, in the future, if you're not telling, then you're a [inaudible 00:22:05] yes kind of level. I think that we just decide if we believe in this company, we're going to take 10% showing at the pre-seed. And then sometimes it becomes complicated because in the pre-seed rounds, some of them they're only 12% dilution and then you kind of have a co-investor and now you have this problem. I just said before that you want to be collaborative.
(00:22:23):
So this is a problem that we're trying to solve and figure out and it is not uncomplicated. But I think that's the main thing that we've discussed over the years except voting. Voting that we have talked about at length so much. But I think that how much shareholding when is something that we constantly talk about and I think that the general view we have is we should get 10% at the first ticket and that's the easiest for everybody.
Jason Jacobs (00:22:43):
And how do you think about first check versus follow on and how do you handle reserves?
Hampus Jakobsson (00:22:51):
Yeah, and then what we do there as well is that, by the way, I realize I didn't say that by 10% traveling I think that everybody who do the math immediately will start thinking, "Oh my god, that's a pretty shallow portfolio." How do you figure out you need crazy unicorns to return your fund. I think the way we do it is we do 35 tickets plus 35 tickets. So the way we think about it is that if you think about the distribution, the probability distribution of getting a 0x fund and getting a 10x fund by doing a broader shallow of portfolio, we increase the floor, the probability of us doing 0.5x fund becomes lower, it's more probable that we do more than 0.5x the money because we have such a broad portfolio. So some will be good.
(00:23:32):
And of course we get for every single deal we do with temps and shareholding, the probability goes up and up and up that we are hit more than 1x and then the more shallow we go and broad we cut the top. So it's very, very, very hard for us to do a 10x fund. It's very hard for anybody to do a 10x fund. So we kind of try to lift the floor quite a lot to make sure that we're in a situation where we feel that we can do a really good fund. And one of the reasons there is, this is our first fund, I think that we want to make sure that we have an opportunity to do Pale Blue Dot 1, Pale Blue Dot two and Pale Blue Dot three on whatever, 4, 5, 6. And I think that what I feel like some people do, which is understandable, they want to show amazing logos.
(00:24:12):
They do 15 logos, 20% shareholding in their first ticket, which is smart. But the problem is that you need to fundraise fund two very, very soon because unless if you roll that two or three years, some of the amazing rounds you did have now got a down round and now your metrics are really bad. And of course if you were lucky or good, whatever you want to call it, then you hit an amazing one and they look really great. So I think the really wanted more of a machine practice where we said, "No, no, let's actually try to do roughly one deal a month. Let's get 10% shareholding for two and a half million Euros, dollars, pounds and let's keep going. Let's add 35 to 40 logos and every month we stack rack the portfolio and we try to figure out to reserves question.
(00:24:56):
We try to not put reserves in the bottom stack, but we always put reserves on everything else. So I think that instead of saying we're double down on our winners, we say we try to avoid not putting [inaudible 00:25:08] on the bottom part. And I think that then people say, oh, what do you mean bottom part? I mean some companies just, they don't work. It's like both the founders and us realize this doesn't work and they actually want to fold the company. Then they of course ease out, some founders separate and the other ones are not keen, they want to continue the business. And some companies they don't have the traction and it just feels very complicated. And then it gets complicated because then you have certain companies where the founders thinks they've got it, but we just feel like this doesn't work and then it becomes complicated.
(00:25:36):
But I think that what we really try to think about a lot is we don't try to guess who wins, we just try to guess so we don't put reserves in companies that we think won't make it. That's kind of our strategy a lot. And then that's the next round so the A round and then the B round, we try to not put as much money in it, but try to actually try to make the whole allocation being precedent seed and [inaudible 00:25:58] not go further. But then we do put a handful of small tickets and then we do [inaudible 00:26:05] in the next round for 10%. We kind of do "Automatically." So for A round it has to be a very big reason we don't, that's like the reverse stack ranking conversation or say a, come on, this is a company that we've rated low for so long time, but then if there's a B round, this becomes a long conversation internally if we should put more money in it.
Jason Jacobs (00:26:22):
And are there situations where you'll ever do more than pro rata?
Hampus Jakobsson (00:26:26):
Only to get to the 10% shareholding. So, if we have-
Jason Jacobs (00:26:33):
Once you're at 10, you're not going to exceed. If there are opportunities where you have allocation for more, let's say at the B that you're not planning to take, do you do anything with that or do you just let it go?
Hampus Jakobsson (00:26:45):
For Pale Blue Dot 1, we didn't, and I think that for Pale Blue Dot 2 we might go slightly higher than 10% and we'll be way more intelligent in how we handle that. So we had for a couple of companies for the B, we just didn't take [inaudible 00:26:57] and I think that we should have been more structured and thinking what we want to do with it. I think that if we look at the LPs we have and going forward with Pale Blue Dot two, we will probably not set opportunity vehicles, like MSPVs. We will probably work closely with LPs that we think that could add value for the company and say, "Here's to [inaudible 00:27:14] our LPs. They would really keen on talking to you. It's really up to you like the startup that because we have our product, we have it at least an allocation we can talk about, right?"
(00:27:22):
There's not a given that we can get it to this LP and we also don't want to force an LP on a startup, but it's way easier for that one of our LPs to kind of say, "Hey, there is 3 million or whatever Pale Blue Dots allocation available. We would love to look at that." So I think that's the plan going forward with Pale Blue Dot 2.
Jason Jacobs (00:27:40):
Got it. And we talked about stage and ownership targets. What about sectors? Especially given that climate really isn't a sector in itself.
Hampus Jakobsson (00:27:50):
No, exactly. I think that we do very much everything. I think that we even have the level where we've realized that every single time we said we don't do an area, we have done that area within six months. So we have said, and when we started the fund, when we talked about the fund, we said, "I don't think we're going to do carbon markets, carbon MRV or anything. We think that's going to be too hard to build really big companies on. There are not enough modes..." We link with every single LP we had a call with said that, "Oh, will you do these carbon accounting companies?" We're like, "I don't think so. We've talked to 30 of them, we're not getting the confidence." And then one of our first logos domestic was Patch, which is not obviously carbon MRV is not what they do, but they're definitely the "Carbon Economy."
(00:28:30):
And then we were like, okay... And then we had this similar thing, we don't think we're going to invest in a food, probably not. It's especially food CPGs. We did that a fish. We're like, oh my god, this is the company, they're so good and we're not going to invest in hardware. Then when Jaro did it, we're like, oh my God, we should just shut our mouths. Every time we say we won't do something, we end up doing it. So I think the way we think about it is exactly what you said. We don't view climate change or climate tech as a sector. It's an aperture. And I think for us it's super important that the company is scalable. They're addressing something that you can fuel with money, that it's not fundamental research. So essentially time is what you're working with.
(00:29:09):
If you give them two more million, they can go faster and not just like you're just giving them salaries to keep being alive and then when they scale, they could actually chip off something at the climate crisis. It shouldn't be that, "Ooh, is this company mostly indexing the crisis or are they trying to help out?" And then I think that for us it's super, super important that the founders are the leaders of tomorrow. We really want to invest in people where we feel like if these people become some of the most powerful people in the world, we want to be really, really happy for that. So when we talk to founder or we feel like these people are, I don't feel they're doing it for the right reasons. It feels really scary to have this conversation. Would you be proud in 10 years when you read the article about them or would you feel like...?
(00:29:53):
Yeah, I mean good their first company did something good and I think that's a conversation we have a lot are these Pale Blue Dot founders and I think that's something that we've been really proud of as well. We do an offsite when we go kayaking with the founders once year in June in the Swiss archipelago and I think that it's so crazy because when all of the founders gather in one point, I think that it's so strange because you needed to feel like, "Oh my God, these people are in a sense fairly similar, very different of course." We've invested in so far 30 companies, so a lot of different founders of all different personalities, a lot of different geographies and sectors and competencies of course.
(00:30:31):
But I think it's so funny because we have some of our founders in Pale Blue Dot, sometimes they say, "I think I met a potential Pale Blue Dot founder," and when we come to that call, you just feel like, "Yeah, you're right, this is Pale Blue Dot founder." And of course it doesn't mean we to sometimes invest rarely so of course we have to love whatever everything about it. But it's so funny when you start feeling that there's a big personality aspect to who we invest in.
Jason Jacobs (00:30:57):
Can we stop there for a second? Hampus, what does it mean in your words to be a Pale Blue Dot founder?
Hampus Jakobsson (00:31:02):
I think that it's slightly different for Heidi, Joel and I, actually, that's the strange thing we talked about this so much. I think for all three of us, it's good people. It's very important that these are people... I think we usually have the nice index questions. Would you leave your kids with this person? Or wouldn't you allow one of your kids to do an internship? Or were you happy that one of your kids did internship at this company? There's certain founders that we both know and the listener to this know that you would say, "Wow, yeah, it depends on who... Yeah, I think so." And then there are other founders who was like, "No, of course. I let my kids travel to their side of the world and work for them. I think that's not a problem. They're amazing." So I think that's a very big criteria that we just feel like these are people that we would trust in multiple level on an emotional level.
(00:31:44):
And then I think when it boils down to more rational, logical parts, I think it is that they're very, very ambitious. I think for you and me, we often talk about how important [inaudible 00:31:54] thought for us, which is such a easy term, but for us it is like I always try to do the calls where I try to pitch them what they do. I just say, "Hey brother Deck, this is what I think you do," and I kind of tell them, and they have a laugh because half of the time I'm half right and often I'm not that good at it. But it's really good because they immediately say, "Okay, you get 80%, let me explain the 20% you didn't get." And I think that conversation becomes so interesting because some people, they just interrupt me and say, "Please don't do this. Can I just run through the slides and tell you what we do?"
(00:32:24):
And I just said like, "No, please can we just try with me?" And I know I don't want to take the stage. That's not what I do. I just want to save you a lot of time. And that you can feel how stale the conversation is. They want to run it slide by slide. They don't want a conversation, they want to put on their stage voice. And I just feel like, no, no, no, no, no, no. I want to work with people that we add each other on WhatsApp and we send each other voice messages and that feeling and that becomes really important for me. So when you move from the cloud of thought where they get what they do in your conversation, for me it is that agile really fast moving where they send me a voice message and I think about it for a bit and I send a one back and they say, "Hey, I've made a mini slide deck for this. What do you think about this?" And we start reading it. I'm like, I love this. This is really good.
(00:33:04):
Then I think that Heidi, she really wants a vision. For her she really loves when she has the feel in her gut for the big vision. I think for Joel, it's very important that he feels like he loves when one solution can unlock another market. So they can do something which sounds fairly small, but you realize if you actually own this thing, you can actually unlock a huge thing after that. But we don't even know what it is. And it's so funny because we're so different on that. So sometimes when we need a founder, I can just in the call say, "This is your company. You should talk to these people," because they're always talking about how to build this platform to take control of something and sometimes I feel like the same thing. This is a Heidi founder.
(00:33:43):
I mean, she would just feel like, whoa, these people are so visionary it's amazing. So I think it is slightly different, but I think at the end of the day, I find a lot of our founders to be extremely nice people that are really trying to solve a problem genuinely and we would trust them a lot and I think is the short version of it.
Yin Lu (00:34:04):
Hey everyone, I'm Yin a partner at MCJ Collective. Here to take a quick minute to tell you about our MCJ membership community, which is born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast. We started in 2019 and have grown to 1000s of members globally each week we're inspired by people who join with different backgrounds and points of view. What we all share is a deep curiosity to learn and a bias to action around ways to accelerate solutions to climate change. Some awesome initiatives have come out of the community. A number of founding teams have met, several nonprofits have been established, and a bunch of hiring has been done.
(00:34:36):
Many early stage investments have been made as well as ongoing events and programming like monthly Women in climate meetups, idea jam sessions for early stage founders, climate book club or workshops and more. Whether you've been in the climate space for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and click on the members tab at the top. Thanks and enjoy the rest of the show.
Jason Jacobs (00:35:03):
Can you talk a bit about the decision process on potential investments, both in terms of the letter of the law, but also in practice?
Hampus Jakobsson (00:35:12):
Yeah, so I usually jokingly say, and this was the founder that said it many years ago that she had me and one other investor, Eric Byrenius at Trellis. This is Anna, who is Eric's current colleague at Trellis, a venture fund. But I invested in her startup and Eric did too. And she once said to me, "Hampus you are Quora, Eric is Wikipedia." You want a fast answer, which is almost right and very quick and very succinct, you ask Hampus. If you want the correct answer, but it takes you a very long time to get through it you ask Eric. So if you ask me what our investment agreement says, I actually don't-
Jason Jacobs (00:35:43):
Your are a European [inaudible 00:35:45] it sounds like.
Hampus Jakobsson (00:35:45):
Yeah, exactly. So I'll give you the Quora answer. No, but the way it works and the way it actually is here is that, and this we've discussed a lot is anybody can lead a deal. So we have a voting mechanism, which is, so it's -1, 0, 1, 2. So -1 is hell no. This is a portfolio risk. Investing in this company, this could take down the whole portfolio. It might be in a country that's very complicated that might propagate legally in a bad way, or it might be that these founders actually could be really, really bad for us in one or another, or very, very controversial topic or something that we would be really afraid of because it could mess up everything, that has still not ever happened. But it's good to have the feeling that you can't stop a deal, then you have zero, no.
(00:36:30):
So that just means like, no, I don't like this. I wouldn't put my money on this. Then you have 1 which is, I like this, this is good. And then you have 2, which is hell, yes, I really want us to invest in this. And that means you lead. And I think what's interesting is what we've done is what you need to invest is somebody needs to say hell yes and nobody needs to say hell no. So we have a lot of deals where one person said hell yes, and both of those said no. And we have a couple of deals where two people said, hell yes, and the other person said no. And we have one deal where we have all kinds of combos of this, which is not including hell no, of course. And it's so funny because it is a very good dynamic.
(00:37:07):
I think we really learned that during the fund is that if you have any kind of majority decision, if any kind of you need... In the start we had you need one hell yes, and one yes. And I think the problem of that is, so if you're in love with a company or if I'm in love with the company, I kind of feel, "Wow, this is amazing, Jason, I need to get you to say yes and I have two people." So I have Heidi and Joel. So I go and tell Heidi, it's like, "I love this company and are really good." And Heidi's like, "I'm lukewarm." I feel like, okay, I'll go and try to pitch a deal. I'll pitch deal and he says like, "Oh, I love it. That's amazing." Now I don't need to bother with Heidi, right? I'm done. Now I'm done.
(00:37:38):
I don't even talk to her. So I just continue and we do the deal and Heidi is like, "Do you want to do it write up?" I'm like, "No, in a sense, I don't care." I'm not saying this happens, but do you mind...? And also, if you have those situations where you need someone else to say yes when they're arguing against you, it's so much harder to be completely transparent than come into the me morning and say, "I had a really bad call with them last night. I don't think this is really good." And then the other ones who said, "I think I'll change my yes to no," you were like, "Oh shit. So you don't want that, right?" But what's so good, what we do is when I say, I love this company, I want to do it, Heidi, Joel can really support me.
(00:38:08):
They can really say, "Isn't the market fairly small?" And I can be like, "What do you mean?" And they're like, "This is what I'm thinking." And I was like, "Oh shit, you're right. I got to ask them this. And we can think about it." And what's important here is we have a completely equal vote, completely equal ownership. So all three of us, Heidi, Joel and I, are like, we can run our deal exactly the way we want and I think this has created so much of a good atmosphere because it really means that you're talking to your colleagues not to get their vote, but actually to get their brain. So you really say, "Can you please start with this company?" I think I'm a hell yes, but I'm now, I'm feeling like I'm leaving out and there's so many good questions who's just going to ask each other?
(00:38:41):
So sometimes we have one company where it's really funny because what happened is Climate X, I don't know, I think the founders know this. But what happened is that the Heidi had a call with them, and then she came out of the call and she was super psyched. It was so amazing. And we talked about it quite a lot and then we talked about it a lot, and she declined it. She was like, "I'm for these three or four reasons." And we were in the office together. And then she came out of the meeting room and said, I just declined it. But we asked for a new meeting and I'm going to have another meeting with him. And as an investor, you never really do that. When you say no, you kind of don't want to have the explanation second and a third and a fourth.
(00:39:18):
And Heidi said, I'll actually do that at second meeting with them. It's a good point. I'll talk to them more. She came on that second call and she walked out of the meeting room and looked at me and said, "Oh, I did explain why we're not in, but I feel actually really bad about it, so I got to speak on this. Let's think about it." I was like, "Okay, no worries." And then she had a second meeting with him, and then she came that meeting and said like, "It gives me so much headache. I don't want to invest in this, and I do want to invest in it." And I have looked at her and I kind have said, "Honestly, Heidi, I'll changed my no vote to yes vote for only one reason and that is, if you can't decline it, there's something there isn't there."
(00:39:56):
And Heidi just looked at me and smiled and she was like, "That's exactly the problem. I see so many problems what they're building, but these people are winners. These people are just so amazing. I can't decline them" and she didn't need my vote. But this conversation of just seeing that, you need that sparring partner where do you say, "You're right. Isn't this amazing? It is amazing." And I think that's really helps you. And I want to say one more thing about this, which I think is the complicated thing. And I think that as a founder, I think that if you come from certain education backgrounds, your business background, you've learned to on a scale, one to five, get all of your things to three or four and sometimes a five star on something. But you really want to get three to four solidly so nobody can say, "Well, you didn't do French or whatever."
(00:40:41):
You don't want anybody to point out the things you're bad at. And I think that as venture funds, especially super early stage funds, pre-season seed funds, we have no issue with something that is not good. We want to see something which is crazy, like crazy good. And I think that what we do is, if you look at the bell curve of founders and startups, like you have the bell curve lowest point you have the crazy bad, and then you have the things that are good and get better, better and then you have the ones that are crazy good. I think the job of a pre-seed fund is not to invest in the middle part, which are obviously good. So our job becomes of sorting if it's crazy good or crazy bad and that's the hard part, right?
(00:41:14):
We have to ask ourselves, it's crazy, yes, but is it good or bad? So most of the companies we invest in, they have massive flaws. There's something that doesn't work, but we believe something is so amazing on it that we think we should do it. And I think the headache is that what that means, that if you're coming from a background or from an education where you've learned to polish your things, but not showing yourself, you cannot build a very, very solid 3.5 to 4 star deck presentation style and what that reflects in our voting system is all of us vote yes. So all of us says, yeah, I think we should do this. I'm yes, I'm yes, I'm yes. And we look at it and it's like, "Don't you want to lead it?" And the person who brought it in says like, "Nah, I really hope that one of you would fall in love with it."
(00:41:55):
And I was like, now I'm in love. I think it's really good. I would super support you. And we have this conversation, we're like, nobody's really in love here. We're all liking this, but we're not in love. And I think that it's kind of the same. I think that you think about it when you have friends, they're living in the same city. Both of them live in York, and then their partner says they've dated for six months, and the partner says, "I've got this gig in San Francisco. I'm going to leave." You have people who said, "Chuck's it's too bad for us." And then when people say, "I'm going to travel with you, long distance relationship, we're going to figure it out." And I think that it's the same if you're not in love, love, you shouldn't do this investment.
(00:42:34):
If you feel like this is good, but it's not crazy love, you shouldn't do it, you should just say there are other fish out in the pond for you, you're going to find someone else and I think is the hard part, I think for a lot of founders to realize that in the early stages you should let your crazy shine. You should really double down on the things that you think is very particular about what you do and I think that becomes very strange in for an early stage fund who believes in voting, who believe in consensus voting. Because if you're crazy, you will piss off somebody in that fund and somebody will say, "We're tempt to invest in this company. They're just too strange." And I think that you shouldn't be strange on purpose for God's sake. I think that you should be you. But I think that's the thing which really reflects in our voting system. We have plenty of three yeses that are in our, we've written an I'm, we've done everything, but we just look at it and it's like, I don't want to lead it. Rats!
Jason Jacobs (00:43:23):
When you look at opportunities, I mean already you mentioned three sectors that are very different from each other. How important is sector expertise within the partnership in terms of categories where you play and what does your diligence process look like and does it vary greatly for these sectors that operate very differently from each other?
Hampus Jakobsson (00:43:48):
I mean, it's a great question. I think it's something that we had imposter syndromes a lot in the beginning. I mean, I think as a founder, you're born with imposter syndrome, so I think that that never goes away. But I think that in the beginning we just asked ourselves, well, can we ever do a deal within chemistry? Can we ever do a deal with this X, Y, Z? And it's really hard, but I think that you realize after a while it's like there's certain kind of deals, certain kind investments I would say we just don't do because we actually don't have a clue what good looks like. If somebody says, we've created this new process of doing this chemical reaction at higher speed, we read the deck and we're like, oh my God, I had great grades in chemistry and my mom is a chemistry professor, but I mean, I don't get this and I actually don't get any energy from it.
(00:44:30):
So I have a hard time understanding what's going on. And then I think that you have all the way into pure software as a service place where we all born and bred in that sector, so we kind of know it. But I think that a majority of our companies we invested in are not. Like if you take BettaF!sh that are consumer packaged goods, if you could take Climate X, it's climate risk evaluation. I mean, all of these companies, none of us have a degree or background, anything in that. So I think that for our backgrounds, I think a lot of times we just have to do a lot of reference calls and have to figure out and ask a lot of experts and I think that's the network you end up building. We had a really fun one when we invested in Phytoform. So Phytoform, what they do is they have machinery assisted, if you want to put it very bluntly, and I think they won't agree to this, but you're essentially machinery assisted genetic engineering.
(00:45:13):
So you're Moderna for plants, so you're essentially ChatGPT for plant genome. So you can look at the plant genome, you can iterate on it and you can figure out how to change it to handle stress, transportation, cold storage, like salt soil, whatever you want. But you're obviously touching a lot of genomics. So you have to understand plant genomics, you have to understand machine learning, you have to understand wet labs, you have to understand greenhouses, you have to understand commodity and so on and so forth. So when we did that investment, we kind of figure out other funds real trust in it. So when we talked to Phytoform, we started talking to Refactor Capital, which owned us in bio. And then I think they said, I think we have a person who can help us TD the machine learning part and we were like, yeah, absolutely. That's great.
(00:46:02):
We have a lot of machine learning background, but if you have somebody who does of course plant genomics, that would be even better. And they said, yeah, Jeff Dean at Google who runs Google Brain. And we were like, okay, that sounds like a pretty stellar reference to figure out if their machine learning works. And then we had a founder, it's an amazing SynBio founder in London to look at a lot of the bio stuff. And then Jeff Dean came back to us and said, "I've read your kind of memo about it and everything. This is great. Not only do I would say a thumbs up to you guys, this is a good investment. I think they know what they're doing. But two questions." I was like, yeah, sure. What Jeff? So number one, "Can I listen the startup, is that fine?" Yes, sir.
(00:46:43):
You can absolutely listen. Number two, can I invest Pale Blue Dot? And we're like, what are you kidding me? This is crazy. Is this happening? Why would you invest in Pale Blue Dot? And he was like, "No, but I mean I read what you wrote about the company and this is clear, this is good writing. It's like, you get what they do and I think can help them." And I think that's the thing you find. I think when you find these, I at least found that a lot of times when we ask for help for some people to help us figure out a company, I think get the people who really add value to you, the whole process. They help you understand and maybe they want to invest, maybe don't invest. And I think that's what we've found so many times when we look at a company, we have times when I think there are three kinds of friends in the world.
(00:47:17):
If I tell you now, "Hey Jason, I'm going to paddle from Dover to Calais from UK to France," you have three kinds of friends. You have one kind of friend who just waves and said, "Great, I'll take the Eurostar, I'll see you in France." They didn't give a shit. They think it's a cool adventure. They take a fun picture of you. They put on Instagram, this crazy friend, they're paddling across. Then you have friends who said, "No, no, don't go." They hold the kayak and go like, "No, you're not going. You're crazy. You can die." And there's the third friend who gets in the boat with you. And I think the latter two friends are both amazing friends. And I think the only one friend who is a shitty friend is the one who says, "Great, I'll grab a beer and go on Eurostar."
(00:47:56):
And you find that when you invest in a startup, I think you find that you have these people that you ask questions and you have people who just say, "Yeah, it's a good sector." And you're like, "That's not help. That's completely meaningless." And then you have people who argued with you why you shouldn't do this company. This is the worst. This sector hasn't changed and sometimes as an investor, I think you get so much energy, you're like, this sector has been stale for 50 years, nothing's happened in this sector for 50 years and that's what they're telling me.
(00:48:19):
This person is telling me this is never going to happen. No innovation's happening for 50 years. You just feel like that's why we should do it. And then some people get in the boat with you like Jeff Dean and say, "Hey, can I come with you? This is it. This is the company." And I think that's the thing where I think that these reference calls so when you want to due diligence calls, they've been so helpful. And in certain sectors we feel clueless. We've done 100s of them sometimes and in certain sectors it's bread and butter, what we've done, and then we talk to a couple of customers and that's what we do.
Jason Jacobs (00:48:50):
Are there any things that you just won't do categorically? For example, is capital intensity something you look at? Is bench level science risk something that you look at is...?" I mean I'll start there.
Hampus Jakobsson (00:49:07):
Yeah, I would put it this way. I think that first of all-
Jason Jacobs (00:49:09):
Regulatory, there's another one I could add.
Hampus Jakobsson (00:49:11):
Yeah, exactly. Regulatory is good. I would say every time we've said we don't do it, we will do it. So I think I'll watch out for saying something here, but I think we're definitely afraid.
Jason Jacobs (00:49:18):
And this is my trick to figure out what you're doing next Hampus, whichever one you say that you won't do.
Hampus Jakobsson (00:49:23):
Exactly. So I might drop it now and say, tell you which one it is. Generally, I think anything which is very, very high capital intensity, high science and creates a commodity output is something that we're fairly afraid of. So, I'm always afraid of something if I look at it and say, "So our money will help you set something up, but the money you need, this is not venture money you need. You need our 1-2 million or this round let's say 2 or 3 million. This round gets to the point where you can go and ask somebody who's essentially a bank to give you 20 million, and the headache is this 20 million will now take venture risk, but they will get bank interest returns. So that is a fundamental problem. Nobody will part with 20 million unless they get to be in the same boat as we are.
(00:50:18):
And the problem is like you won't get 20 million for $100 million post valuation. So your dilution, it won't work. And I think that there are certain companies you look at, we feel like we actually think that the 2 million will take you far enough that you could do that. Or there could be companies were like, "No, the next one is not 20." This is all customer finance. It is the first setups you do they will actually be paid by the customers. So one of our companies, Pebble, they have that situation where they build massive big hardware things. And I mean, their customers are saying, "Could you set up one here and we'll pay you for it?" And I think then of course the CapEx problem is a lot less. But I think that's a conversation in the due diligence and the conversation we have with the founders.
(00:51:03):
I think one thing that not only do we with a lot of people on the second meeting, we're having them say, "Oh, please just add me on WhatsApp. Let's chat about it." The other thing we do is when we start talking about walking down the aisle together and it's like we want to lead this round, we create a document, a notion page, which we call fund engage, where we write about what we love with the company, what are the risk... Every single fund, of course in the world does that. But I think what we do, which is a bit mad hat, is we share that with them when we spend roughly five minutes on it. So we just add them to the document and say, "Here it is. You go write in it, I'll write in it" and we just start writing in it.
(00:51:37):
And then with some founders, you just see they look in it and like, "What do you mean with this question?" And we say, "We think this is going to be a big problem." And then it's like, "Oh, this is amazing. Thanks. I didn't ever think about follow on funding." That's a great, who is the typical venture fund that would do the next round? Or what do we aspire to? Or stuff like that. And they start writing and we just have an amazing jam where they're on WhatsApp and chatting to them and sending voice messages, but they're also typing this notion and you just feel like, wow, these are the people we like, and sometimes we look at that and feel like, oh, they're pasting in 100s of doctoral thesises and everything we feel is uncomfortable about this. Or we feel like, no, no, they're on.
(00:52:13):
They're driving like we are driving. So I think that process, I would say if we feel that this is not going to be 20 million to get the technology level, blah, blah, blah, and that 20 million will be non venture money that needs, they will take another interest risk and the output is a commodity or isn't the commodity because then I think you're back at Cleantech that I think is one of the reasons I think Cleantech failed was because it was high complexity research needing high CapEx, creating commodity outputs. And the big customer was essentially government lubricants. So I think that's like if we find a company that we talked about it a lot.
Jason Jacobs (00:52:57):
Given that this is a climate focused fund, how do you think about impact? How do you measure impact and how has that evolved over time, each of those?
Hampus Jakobsson (00:53:11):
Yeah, I think it's an amazing question. It's a horrible question. Pale Blue Dot 1 in Europe we have an Article 8 Fund. So we do measure and do stuff. Pale Blue Dot 2 will be an Article 9 Fund, which means that we have much higher reporting requirements. And I think generally we believe that we want every single company to have a chance at buckling out one of the dents in the universe and actually making the world work again. So we can't invest something which is recycling socks. It's just like that's not enough. If you can't find any category Drawdown or any article about this climate problem, it's just a joke. We can't do it. And so that, that's first of all, but we are also super, super, super afraid of kind of the Buddhist impact way of looking at it where you're so afraid to do any damage that you want to measure it so meticulously that the founders are spending so much of their time filling out and calculating and guessing and oh, by the way, in the lab we actually have one plastic cap. Oh my God, I didn't realize that.
(00:54:10):
Every month we take off a cap of this plastic thing. Where should we fill that out? That just feels like, please don't do that. And I think one of the reasons to that is really because [inaudible 00:54:20] venture is a power law game. So the only thing that matters impact-wise are the ones that are the head of the power law. So if one of the company scales to be an immense size, they will have potentially huge impact, both negative and positive rights, which means, and we all believe that there's going to be a couple of pivots and a couple of changes all the way. So for us it really becomes a question, is this sector really big? Is this thing they're doing? I mean now direction, if they're talking about whatever heat pumps, yep, heat pumps is big, that's going to be big.
(00:54:53):
If they're talking about energy generation, that's going to be big. If they're talking about fertilizers, yep, it's big. You don't have to talk about, "Is fertilizer bigger than heat pumps?" It's like it's up there. And then number two, are these the kind of founders that will stick to it and actually not pivot and become a military surveillance company? Because every single company that is like MRV company, the measurement reporting verification, they work with satellite data, they gather this thing, there's such a big risk that they got called by [inaudible 00:55:21] or one of the governments and say, could you help us here? Or one of the oil companies. It's like we actually have this pipeline that we need to look for and make sure that it doesn't happen to it. And then you can say, as a nice founder can say, oh, it's good to manage one of the pipelines because if they break, that's a massive oil leak or methane leak or something that's really good where should definitely monitor that.
(00:55:42):
And now slowly you're getting into making company which is actually not trying to change climate change. You're just trying to build the company. So for us, it's so important that when we talk to the founders, it's like the market is huge. Climate market I mean is a huge problem. Climate addressable market is what I used to call it instead of the total addressable market. And then the founders are people that we actually think are going to go for the win and actually make this company about climate and not pivot out of that to just make a normal company to make money. But then I think when it comes to the ranking of are you the number one problem or number 15 problem, we don't care. We really don't care. So every single company needs to actually be up there, but we don't have a giga ton target. We don't have anything at all.
(00:56:26):
And also that gets back to you remember I said that unlocking a second market. So with certain companies we're invested in and the climate thesis is actually fairly low. If you to look at what they do today, you're like, this is good, but I mean how good can it be? But then you look at our thesis and why invested you realize. So if they succeed, they're going to completely turn the market regenerative agriculture, that's huge. That's really, really big. But in the first business model it's like this is okay, but it's not the biggest problem. But I think that's the thing because we're precedent seed. We have to think about what happens three years down the line, eight years down the line when this impact actually do the big punches.
Jason Jacobs (00:57:06):
What about reporting?
Hampus Jakobsson (00:57:08):
Every single company has a climate thesis, which is a scientific reason why we think this sector is big. Every single company has a climate metric which we set up with the founders, which we have a conversation about and it's not carbon equivalence. It is like how much of square miles of forest do you protect from forest fires? Somebody can plug that into the math and try to calculate how much of that is in carbon equivalence. But we want to leave it at that. And the reason is, my degree is in American analysis and machine learning, I always tell anybody who wants a perfect number, I say, "You know what happens when you multiply bullshit with bullshit, you get bullshit squared." And that's kind of what you get. So the problem is like let's say you take the perfect company, you make vegan burgers, it's like obviously a climate changer, you're like done.
(00:57:50):
It's like no vegan burgers, that's amazing. Beef is really bad... The first question if you really want to go into that path is this product catering to meat eaters or vegetarians and vegans because if this company goes to vegans, this is worse than what they're eating today because they're like whatever. But if you go to meat eaters, this is amazing. And of course this company cannot control who eats it. So I kind of feel like every time you want to go down and get the carbon equivalence three decimal points, you're just fooling yourself. I think it's such [inaudible 00:58:21] and I think that I get it, people want an aggregated nice number, it feels so good, but I think the problem is they don't really see the binary tree of lies that are summed up together to number that is not true at all.
(00:58:33):
And I think that's kind of what got us here also. I think why people are very skeptical about sucking down carbon from the sky. They just say, "Wait, wait, wait. If people can suck down from the carbon sky, they can continue emitting, that's true, right? That's true. But I mean who do you think will do that? And I think that's guess the conversation. It's like if we fudge the numbers and hide stuff, people do anything. But if we stop doing that and actually says, no, I want to report the things I know and the real stuff I know, and then you can multiply the numbers, you can function numbers if you want them. Then I think that the truth is going to come out.
Jason Jacobs (00:59:03):
And when you think about the different potential areas of impact, I mean I'll just name a few. I mean you can build products or deliver services that emit less than today's alternatives. You can remove carbon either at point of a mission or from the sky. There's a whole resiliency and catastrophe avoidance and things like that. How do you think about, oh, and then actually there's more. There's like reskilling labor forces and there's winning hearts and minds and stuff like that. So how do you think about impact areas and are there any areas where that could be considered climate impact where you won't play?
Hampus Jakobsson (00:59:50):
I would say that I think we would do anything if we meet a company that trains people to install heat pumps, that feels like the climate thesis is not a problem. We would believe in it, or re-skilled labor or something. That's not a problem. I think that doesn't mean we would invest in it because there might be other issues. But I think that [inaudible 01:00:10] a system to help climate advocacy or changing the democratic system and helping something. I think if we feel this company's focused on climate, what they do, they make money. Their business model is tied to the hip on the climate target. That's good if you help politicians win system, whatever. Now I'm simplifying it, dumbing it down quite a lot here. And the founders are kind of climate people. There's no [inaudible 01:00:44] and reasoning to say that's a climate company because this tech will be used by everybody.
(01:00:48):
So it's super hard. So the same thing is if you must in the typical satellite company that is going to do a bit of this bit and that it's not a climate company, it does some climate, but it's not a climate company necessarily. So I think for us, when they make money, they make climate. That's the five year old level description here. But I think it feels so much better. But here's a strange situation we've had. We've had a couple of companies where we looked at where the drawdown category looks great. Lindsey, our researcher, says the climate impact it's really amazing. What they do is really good, but we just feel for other reasons, which are not about the founders, not about the market, but for other "ESG reasons," we feel awkward about it and don't do it.
(01:01:27):
So we have one company where we looked at we really love the founders, they're amazing. We really love the product. They make essentially artificially made chocolate. So they make chocolate without cocoa. Amazing founders, amazing product, impact wise cocoa is huge, really, really bad. It's one of the big top polluters. If you take away meat, then you have coffee and cocoa up there, it's really bad. So taking that out of the market's great. When we looked at the company and we talked to them, we started having conversation in the office, which we got this colonial imperial feeling about not the founders. Again, I really want to make sure that everybody gets, the founders are amazing, we love them. But I mean that feeling of there companies in the world who we colonized, the global north colonized, forced them to grow co cocoa and chocolate and other things on their land, take it away for them and exporting it up north to sell it.
(01:02:20):
And now we're going to make that chocolate in Ottawa or in San Francisco or in New York or in Basingstoke wherever. That just didn't feel very nice. So that was a company where we talked about it and we just felt this feels really weird, but I don't think we're going to do this company. And it was so strange because you can have this conversation in so many ways where we have to remind ourselves sometimes we're a climate fund, we're not an ESG fund, which means that if a company creates lots of great jobs but they're not really working with climate, we shouldn't do it.
(01:02:52):
But also if they're working with climate and they might be a bit complicated on other factors as labor, we should ask ourselves is that our problem? If this is a robotics company, that means that this whole process will reduce with 60% of climate impact on steel production, whatever, which would be huge. But it will take every single worker out of the steel industry from cradle to grave. A lot of communities going to lose jobs. But yeah, I mean we need to get decarbonized steel. So that's something we have a lot of conversations about which are complicated.
Jason Jacobs (01:03:22):
How do you think about geography?
Hampus Jakobsson (01:03:24):
We do all over Europe and US and in the US we do everything that we practically can do. So what I mean by that is West Coast is nine hours time difference from here. So it is uncomfortable. We all of us have kids, so it's not amazing. East coast is not a problem at all. And then all over Europe we don't really care. I mean, how many have done, I think this is not going to sum up to 30, but we have done. Six companies in the US, nine in the UK, two in France, three in Benelux, five in Germany, one in Austria, four in Scandinavia. It doesn't sum up to 30, does it? But I think that you see the spread, it's just like it doesn't really matter for us. But I think that it's just practical and I think that the only thing is we have a certain number of companies in the US that are West Coast that we actually feel are an amazing fit.
(01:04:21):
But we realize that this is a company that they are very, very good at what they do, but they need more of startup savviness and that's something that we know that we can help them with because that's what we love and we really love kind of co-creating companies with people. But this means you're going to co-create with people 11:00 PM in the evening, twice, three times a week and on weekends and that is hard. So when we do West Coast, it's typically that we feel like this is something where we can help them on a biweekly basis for an hour and that's going to be our role. So getting co-investors there and also figuring out that our role is not going to be in the trenches with them, which is usually what we love, but it's going to be more of checking in and helping them with recruiting or helping them fundraising something that you can do a synchronously a lot.
(01:05:06):
Whereas in when we do a company in Europe or on the West Coast as are on the east coast in the US, I mean we have startup founders that I usually say there's one of the founders I invested in 10 years ago said, "In this super strange long-term game when you don't know if you're doing the right things, you don't know if a company is good or bad and anything, how do you know what is your index or anything that you're in the right direction?" And I said to him, "I think to honest be is when the founder pings me on Friday evening and ask me if I can help them tonight or Saturday or Sunday because they know that it's uncomfortable for me." They know this is going to be me negotiating with my wife and kids if I can do this. It's also uncomfortable for them, but they trust in, they give me and say, I trust risotto friends, close friends that you would help me.
(01:05:53):
That feels so amazing because then I think we've built a relationship that's really, really good. And I think that's usually the signal I try to figure out and I don't want, this is not a message for the founders and investors to ping me on weekends, but it is that feeling of you're like, we have this trust in each other that if I say it's uncomfortable and no, please, they get it. But also they're asking, right? It's offending, could you help me move on Christmas day? It is like, gees man, Christmas day, maybe we can do it other morning. You try to figure out and I think that is an amazing feeling. So the problem is we can't have companies on the West Coast that want to move on Christmas day. That is just [inaudible 01:06:31].
Jason Jacobs (01:06:31):
So switching gears, one thing we didn't talk about is just the LP mix. You talked about how you kind of had this dual pronged process of operators and professionals. What is the mix of operators and professionals and then within that professional bucket, what's the mix of impact capital and financial and how do you envision that that will evolve over time as you look at fund two and beyond?
Hampus Jakobsson (01:06:54):
Yeah, so none of our investors, I think that from one of our LPs in fund one, I think we're in their impact pockets of what they do. But all of the others we're not. We're in their-
Jason Jacobs (01:07:08):
Strictly financial decision.
Hampus Jakobsson (01:07:10):
Strictly financial, exactly. And so in fund one we have 63 LPs and it is, I'm trying to think about, we have one pension fund, we have three fund of funds, we have one venture fund and then we have six big family offices and the rest are operators, startup founders. So there's a pretty, and of course the money is the opposite direction. The majority of the money are lot from the operators. So I think that's with Pale Blue Dot 1, with Pale Blue Dot 2, we've taken an approach where we actually, every single LP that does more than 1% of the fund, we have an alignment call with and every single new LP who was not LP in Pale Blue Dot 1, we have an alignment call with to actually figure out where's the money coming from, where's the money going to? Why are they investing in us? And it is when they have decided, so they have said we want to master in Pale Blue Dot 2, we say, can we just have a call?
(01:08:08):
And we send them to in advance the script. It's like, this is what we want to ask you. And I think it's really good because I think that we just also want to feel proud of our LPs. We've had some of our founders to ask us, who said, who are your investors? We're taking a check from you. Is there a big ordination in that [inaudible 01:08:28]? It's like is there a big company that we might know that is in the fossil fuel extraction world? And I think it's so good to just be able to say, "No, not at all." We want to make sure that we actually could tell you exactly on our LPs and we could be proud of it. Do we know what all of our LPs are doing with all of their money? No, of course not. Like these are family offices.
(01:08:45):
You have no too. But for Pale Blue Dot 2, we're trying to up that one more step and really try to make sure that we can be even pushing more. And I think the funny thing is I've noticed is that it's kind of the same. We have every single company in West and have a climate pledge that we send the founders too. It's part of our diligence saying we offer them a term sheet. Sorry, we say, "Here's our climate pledge. We talked about it before, but here's in writing, you can read it, whatever." Some people ask for a lot and we tell them a lot earlier and it's a pledge that they say that they want to pledge personally and as a company, blah, blah, blah, blah. It's legally impossible to go after them. It's just a pledge. What we've found is, again, back to the Pale Blue Dot founders, the Pale Blue Dot people, is that every single founder, but two have signed this with joy and said, this is amazing.
(01:09:30):
Two founders said this is not hard enough and we want to edit this because we don't actually want to sign on something that actually is an effort doing. And I think it's funny because when we did this pledge, we were thinking in the beginning, "Oh shit, will we lose deals? Some of this will we have companies that will go away?" And it's funny because it's kind of the same now with LPs when we say we need this alignment, are you okay with this? Old family offices are uncomfortable. They feel like, I don't want to talk where our money's from. I don't want to do that. But by God, many, many LPs said, "This is amazing. This is really good. This is really good. Thanks for asking us these questions. We've spent the last 15 years on crafting this how we think about how we're investing. Thank you for asking this question." And it's funny because I thought that it would make people stressed, but I mean the majority of people are saying, thanks for asking. This is great.
Jason Jacobs (01:10:19):
One unrelated question to Pale blue Dot, but it got triggered when you were talking about the oil nations and oil money and things like that. So it's a bigger picture question, but what do you think the role is of fossil fuels in the energy transition? And relatively, what do you think is the role of fossil fuel companies in the energy transition?
Hampus Jakobsson (01:10:45):
Yeah, I think that everybody used to be in the '80s positive to fossil fuel. I think anybody who says that all we shouldn't have added fossil fuel on the planet, they're the curse and they're the scourge. Well, they should get off their pedestal because they wouldn't be in that warm room and eat the food they would be eating without oil. So it's very clear that in the '60s, '70s, '80s, whatever there was up to a point, I think we can all agree that we're all positive to fossil fuels. And I think it started turning right. And I think that, if you asked me two years ago, I would've said, I'm super negative. Animals and fossil fuel, get it out. And I think that we've seen some of the portfolio founders to hire people who came from the fossil fuel world and said, "Holy shit, this person changed everything."
(01:11:32):
If you want to buy and source pumps and valves and stuff and get it mounted and built, these people are geniuses, they're geniuses. So I think that I've really softened up and I think that I did an interview for Pebble when they just hired their VP of engineering and I was just blown away by the guy. He was so amazing, so amazing and I had all of these questions, you used to work in oil kind of things. And I mean you get it, that wasn't this thing when he joined the industry and I mean he had kids and family and everything. And then I mean it's all about a person and I soft enough to realizing they do have a role because if you want to suck down carbon from the sky, you need to build big installations and they know how to do it.
(01:12:14):
If you need to transport stuff, they know how to do it, all of these things you need to do it. If you're working with anything which is actually real physical objects, the oil industry, trillions of dollars per year are in that part. My headache with the fossil fuel industry is that all of their incentives are to get everybody to not phase them out and I think there are two things that are happening. One is in Pale Blue Dot 1, we had a couple of LPs who wanted to join who came from either very, the obvious ones that are talking to a lot of climate funds. And in that conversation I said to them, they said, "Oh, $2 trillion per year goes into climate from us." And I was like, "Holy shit, that's amazing. That's crazy." And then I hesitate and pause, I'm like, how much is actually going not into climate?
(01:12:58):
And they were like, "Oh, it's so hard to say." And I said, okay, okay, sorry, let me put it this way. Is 90% going into the old black money so to say? And they were like, "Yeah, 90 I would say. 95? Probably. 98? 99? Yeah. Yes, 99." So you're selling me that you're spending 1% on climate and 99% on making sure continue polluting. And they were like, "Well, we're spending trillions on climate, but you're also spending bazillions on trying to destroy the planet." And of course they're not intentfully trying to destroy the planet. They're keeping our schools with electricity and universities and the hospitals and making sure we can transfer everything. But I just feel like there's way too much money in trying to not change. And I think it used to be. Back in the '80s, the oil companies just try to lie and just create confusion.
(01:13:59):
It's like, is this actually a smoking bad for you? Is oil bad? And then in the '90s, 2000s it started by just adding a lot of complexity, renaming stuff. It's like just listen to the word. Natural gas, I mean the only natural gas that exists in the world comes from your butt. I think everything else is like you don't want that around. I mean you don't want that around either. But I mean the gas that we burn that it's called natural gas, it poisons people into their home and it pollutes like everything and increases temperatures. So we don't want that in how naturally we want to brand it. And nowadays, what the fossil fuel companies are doing is they're funding communities in the global south trying to get women to say, we want our kids to also have what you had in the global north.
(01:14:39):
And I mean it's really hard to say, no, you can't have it because you're polluting planet because we polluted the planet. But I mean if you trace the money where it came from those, it's a foundation and that foundation is by an oil company. So I think that I have very little tolerance for that kind of double speak or double act when I just feel like I really want to make sure that we get out of exploiting animals and extracting fossil fuels to the fastest speed we technically can. And I'm happy to lower the temperature in my house and freeze a bit if that's what needed and I know that that's easy for me to say, but I think that I just wish that we could curb that way faster and not take their money, hire their people, yes.
Jason Jacobs (01:15:23):
I know we're running short on time. There's a few topics I want to make sure we touch on before we wrap up. One is, I mean you're clearly driven by impact as a firm, yet you mentioned that you don't actually have any impact dollars in the LP ranks, at least from the professionals. Why is that?
Hampus Jakobsson (01:15:42):
I think that we essentially only declined two kinds of LPs. We declined LPs who we felt came from oil or something or we just felt oof, this is not something we can represent and we also declined LPs who came from pure impact who wanted tons of reporting. And the reason to that is that we just feel like it's going to be so onerous for the founders. We're going to ask them for so much reporting and so much data to then sum it up to be able to give it to somebody who will just put it in their reports and nobody will use it for real. So when we look at how we're going to handle Article 9. So with Article 9, we have to get the data from the startups. There's no way we can get away with not doing a lot of admin and doing stuff.
(01:16:22):
We going to do two things. One, we're going to try to do it on our own what we can, but then with the part where the startups has to do and there's no way they can get away from it, we ask them they're going to be bucket questions. Do you have an office? Yes, no. Is your office less than four people? Five to 10, 11 to 200, whatever, 101 to 500. And then when they click that bucket of saying 10, 11 to whatever I said, now 100, we're going to take the carbon equivalence of hundred highest measurement in that bucket and then we're going to sum up those and report it. And anybody who's going to look at us, it's going to be look way worse because all of the companies will have huge offices and big fleets and whatever and it's like somebody might say, whoa, this is not that good.
(01:17:06):
And we're like, no, no, no, no, no. But the thing is the companies, their metrics won't be worse. They will grow and when they're really big, this cover's going to flip to the next level. But we're going to see that the negative impact on the portfolio of the companies is it's going to be kind of a j-curve version of it. It's going to look really bad fairly quickly and then it's going to turn around. And I think the reason is that when we talk to our investors, we try to really say that at the end of the game, it's not three or four or five companies that really changes it that matter and most of the companies will go away. They will not really matter. And if that company has one car which is not electric, it doesn't matter.
(01:17:48):
What really matters is that if we invest, we don't want to invest in a delivery company in South America that has fossil fuel cars with their promise that they're going to move EVs because that promise has to be very, very sure that that's going to happen and very, very fast. But we're happy to invest in a startup that does last minute delivery, which is purely electric because that company is going to be so expensive for them to have one fossil fuel scooter, car or whatever. So I think that's one of the things where I think that we could broaden our minds a bit and invest in the greenest oil field or the transition company, which is makes a fossil fuel company be green or gets, what is it cows to graze more structurally. So they do less impact. Right now we haven't been able to grapple that. We just feel super uncomfortable whenever we talk about it.
(01:18:35):
So I think that gets you with to your question, which is like why don't we have the impact pockets at piece? It's because they want us do this. They want to show the carbon equivalent of that company and show us up there on the top five and then we kind of feel that we're multiplying bullshit by bullshit and that just feels disingenuous. I really personally believe, I love intellectual honesty. I just love when I feel like I really honestly logically believe I might be lying to myself, but at least I'm not lying to you.
Jason Jacobs (01:19:02):
Hampus, do you want to talk briefly about the drop?
Hampus Jakobsson (01:19:06):
Yeah, absolutely. So we do this yearly climate conference last year was a prototype. What happened was that when I did this event in Berlin 2019, I did it out of two reasons I did. It was first because I want to prototype and figure out if that was a thing. The other thing is I was very tired of going to startup conferences and feeling that I was on the cherry on the cake talking about climate if I did that. So I kind of felt like no, every single startup or every single western stage talk about what to do. And then they brought up somebody who talks about climate. It was kind of like nowadays if you go to startup conference, there's a one climate person, it used to be 10 years ago there was a woman on stage. Now it's a climate person on stage. You just feel like, what the...?
(01:19:39):
Come on. It's make it about climate for God sake. That's important. So that was one fear I had. But the other fear I had is when you actually go to the climate forums, I think there are three kinds of forums. You have the Davos kind of feeling of forums, which I haven't been to Davos, but you get that feeling of people, they brag about what they do and you feel like, yeah, can we talk? Can we share knowledge about [inaudible 01:19:58]? You have the impact forums where people are talking about how they step without stepping on bugs, kind of conversational, how you measure this and that. And I feel like, okay. And then in the third kind of forum, which are the IPC kind of level conversations which are discuss what probability chances were fucked, how, when, and it just feels like can we just please all do action?
(01:20:15):
Can we try to do stuff every day to move this forward and share knowledge? And so when we started Pale Blue Dot, we always said we should do that conference again that we did in Berlin. Oh, that felt like the great feeling and Heidi's like she's big on events. She was like, this is a great thing we should gather. Joel and Heidi set up a lot of events where they did it with their previous thing where they did their previous funds. We just talked about a lot. We know we love this. COVID came, there was no reason to have events. And then last year we just said, we just started. I don't want to go to events. And it was like, but wait, wait, wait, wait. Shouldn't we make an event that we want to go to? So then let's make an event which is for action biased people within climate who are really working on it, who want to inspire each other and share knowledge. That's what we want.
(01:21:00):
So that's the idea. And last year we did a prototype, 600 people. This year it's 800 people. It's the 7th of September. It's in the city of Malmo, which is a tiny city. It's just next to Copenhagen so people can get to Copenhagen. It's fairly easy with trains and planes. And the nice thing is 800 people, everything single thing on stage, the keynote stages are "Uninvestible." It is how we collaborate with grids or the political system or it's climate activism or it is how the old companies are working with media or stuff like that. There's not going to be a single investor in the audience to say, I want to invest in that. Or a single startup founders that says, "I'll do that idea but I'll do it for this. Right?" But what it will do I think is kind of fuse us all together and it's going to open our minds of like, "Oh my god, you can be a lawyer and you can sue governments."
(01:21:47):
That's amazing. I never thought about that. That's crazy, right? You can be a [inaudible 01:21:51] researcher and work with this. That's amazing. You can really open your minds to it. And then we have these round tables and the round tables are done by people in industry who say we have a fund, we have invested a lot in Synbio. But holy crap, Synbio is a hard sector because of these CapEx issues and research and commodity outputs. I really want to talk about what people should and shouldn't invest in. So for example, there are two funds that are going to talk about that. There are a round table, 20 people, 45 minutes where they're going to share very honestly this is what you shouldn't invest in Synbio. And they've invested in 48 plus Symbio companies and they've had their wins and their losses and they're not going to sit there and pitch LPs why they should invest in their funds.
(01:22:27):
They're both big family offices. They have no reason to kind of do that. But they're going to say this is what been hard. And I think we have a lot of these round tables, the good thing about them, it's really about there's kind of like it's a WhatsApp code on the table. So you go up on the table, you scan it, you're part of the group, you sit down, you listen, there's a note taker, you get the thing moving, you really get to bond with other people. You kind of ping them on WhatsApp and chat with them. And I think that's the point is we want people to leave the event feeling super inspired, but also their network is quadruple. They just feel like it's hard to [inaudible 01:22:58] your network Jason.
(01:22:58):
But I think that they just feel like, "Oh my god, I met so many people that are also working on figuring out damage and they were great people and we had a great day." So that's the plan. So that's kind of the short thing about the drop and we're super excited to do it again. It feels we learned so much last year and it's going to be even more fun this year.
Jason Jacobs (01:23:15):
Last two. One is just who do you want to hear from, if anybody, and how can the audience help you? And then parting one is just anything I didn't ask that I should have or any parting words for listeners?
Hampus Jakobsson (01:23:31):
I think that there are a couple of things. So I think I would love to hear, I think you should really interview funds that are trying to do climate. I think it would really interesting to invest some of the big amazing funds that the marque logos that we all know of that are saying we want to do more climate and have a conversation is-
Jason Jacobs (01:23:47):
Recording one of those this week, by the way.
Hampus Jakobsson (01:23:48):
Oh that's great.
Jason Jacobs (01:23:49):
With a big generalist fund that is doing just that.
Hampus Jakobsson (01:23:52):
But that's so interesting because I know a couple of funds that we are having a conversation with quite a lot and how they're "Struggling" and I think it's really interesting. What are they struggling with to understand that? So I would love to listen to that. The only thing I would say is if you listen to this and are super inspired, I would love to meet you at the drop. It would be really fun. You just go in, click apply on the waiting list and we approve people from the inside to make sure that people are coming, that have the right mindset. And I think that I really want to make sure that everybody who works in climate action oriented, who wants to work in climate, they try to gather and actually meet each other and talk about it so I get so much energy from that, personally.
(01:24:31):
I think the question you didn't ask, which I can't answer, but I would love to get really good inspiration of what to read or watch or something which is inspirational about climate, which isn't doomsday climate fiction or which isn't a documentary about soil depletion. And I think the only thing I've ever read personally is The Overstory. I think that was the book. I mean I've read and watched like Kiss the Earth and Ministry of Future and everything else, but I feel like most of the things I read, they don't work as fiction for me otherwise. If I read a climate fiction book, they saw a fiction book. It's a climate concept book that's wrapped in a fiction thing and the same thing. I think that I would love to get more people inspired and I would love to get recommendations for books I should read or films I should watch or TV series that are about climate but that are not about climate that I would love someone else to be asked so I can get great inspiration from it.
(01:25:27):
I love reading fiction books. It teleports my mind into other people's bodies and I think I would love to do that more with stuff that are climate.
Jason Jacobs (01:25:35):
Any final parting words, Hampus?
Hampus Jakobsson (01:25:36):
I think the only thing is I used to not understand how I could apply my career to climate. I would love that everybody realizes that they can apply their career into climate because I think we vote with our votes, we vote with our feet, we vote with our money and we vote with our careers. And I think the problem is that I think a lot of people just feel like some of these, I don't know how to vote with it. I don't know how to do it. And they try to be a climate champion by buying less plastic and eating more vegetarian. But that's good. But I think that it's way better if they can change their career to actually work daily on climate and it's hard. But I think there is a job out there ever for everybody to actually apply themselves.
(01:26:17):
I think about if you've watched Expanse, the TV series or you read the books, if you look at the people who live on Mars, it feels for me, I've never seen the economical statistics on the people who live on Mars, but for me it feels like a third of them working with Terraforming so climate, a third of them is a military to make sure that Earth doesn't invade them and a third of them in the service profession to make sure that everybody else has a hotel and food to eat. And I think that's probably what we're going to end up with doing here. We're going to end up a third of the population working with trying to stifle climate change. A third is going to make sure that we sadly need a military if this [inaudible 01:26:51] goes too long. And a third will just try to make sure that everyone else can do their job. And I really hope that we don't have to get there with a third of us being military.
Jason Jacobs (01:26:55):
Well, Hampus awesome discussion. Gosh, it was long, but we could have easily doubled or tripled it and had plenty of good stuff to talk about. But thank you so much for making the time and for all the work that you're doing in the space and the example that you're setting for us at MCJ and I know for so many others as well. So thank you and best of luck to you and the team.
Hampus Jakobsson (01:27:19):
Thanks a lot for doing this, Jason, I think you still have one of the best podcasts in the industry.
Jason Jacobs (01:27:24):
Thanks again for joining us on My Climate Journey podcast.
Cody Simms (01:27:28):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity.
Jason Jacobs (01:27:37):
If you'd like to learn more about MCJ Collective, visit us@mcjcollective.com and if you have a guest suggestion, let us know that via Twitter at MCJ Pod
Yin Lu (01:27:50):
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Cody Simms (01:28:00):
Thanks and see you next episode.

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Capital Series: Hampus Jakobsson, Pale Blue Dot

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