It’s hard to be a startup, given that most small businesses don’t survive past five years. It’s really hard to be a clean energy startup, given that venture capital firms underinvest in tough technology challenges. And it’s hardest of all to be a woman- and/or minority-led clean energy startup, given that venture capital firms underinvest even more egregiously in underrepresented founders.
All of these barriers prevent the United States from achieving its full potential in terms of both entrepreneurial dynamism and climate leadership. Technology startups provide outsized economic benefits by creating employment opportunities, competing with established companies, and paying their workers higher wages than the national median—yet startup activity has experienced a decades-long decline. Despite a long drought of private-sector underinvestment, clean energy startups are an especially important part of the U.S. innovation ecosystem required to develop and deploy the technologies needed to mitigate climate change. And as long as structural barriers stifle entry into the clean energy ecosystem by innovators who are women and Black, Indigenous, and people of color (BIPOC), we will squander essential entrepreneurial talent.