Universities globally are increasingly positioning themselves as hubs of business innovation, fostering entrepreneurship through incubators, accelerators, student clubs and countless networking events. This support has become an important driver of innovation in climate tech, with university-based innovators often encouraged to commercialise their climate solutions, then referred to climate tech accelerators that try to prepare them to access finance and build their ideas into thriving businesses.
The academic community’s growing focus on supporting entrepreneurial innovation is promising — as is the emergence of climate tech as a key priority of these efforts. However, beneath this veneer of progress lies a troubling reality: Universities’ approach to fostering climate tech entrepreneurship is fundamentally flawed. Rather than empowering true innovation, the majority of these institutions prioritise the demands of venture capitalists (VCs) over the needs of both climate innovators and our planet.
Forcing Climate Innovators to Become VC-Focused Entrepreneurs
The typical trajectory for a potential climate entrepreneur in the university ecosystem is the same as it is for any founder. Whether they’re students or academics, these would-be entrepreneurs are funneled into a rigid pipeline: Conceive an idea, pitch it to VCs, secure funding and scale up. This path, while seemingly straightforward, is fraught with pressure. The system compels individuals — often experts in their field with a passion for climate solutions — to morph into entrepreneurs, whether or not this aligns with their personal or professional goals.
What is particularly alarming is that this system is built around satisfying the needs of VCs, not climate innovators. The steps are almost ritualistic: Prepare a pitch deck, join a pitching event, negotiate with VCs — and then, if lucky, secure funding. But what comes next? More often than not, the company’s direction is steered by the whims of the investors rather than the original vision of the tech inventor. Co-founders may be swapped, and the company structure may even be reshaped to align with VCs’ interests.
The reality is that many of the people who develop climate technologies in a university setting are “forced entrepreneurs,” who differ from traditional entrepreneurs in other sectors in several key ways. Successful entrepreneurs are typically skilled at finding promising business opportunities, creating and managing teams, understanding finances and earning high profits, then exiting and starting another business. These people could establish a fintech company yesterday, trade cryptocurrency today, and start a new business selling medical masks tomorrow. From an investor’s point of view, these types of serial entrepreneurs are valuable, and the goal is to find the ones who can generate a 10x or 20x return on investment.
But most climate innovators in academia don’t fit that mold. They’re more likely to be brilliant researchers who spend years perfecting a climate tech solution. Yet when these individuals turn to their universities for support in bringing these innovations to the broader public, they are expected to develop a standardised set of skills that have little to do with the work they’ve done for their entire career. They must learn to pitch, navigate financials, form teams and balance investor demands, in preparation for the long, grueling fundraising process. Since these skills are often far removed from their core expertise, their stress is palpable — especially when faced with investors who, despite their impact-oriented rhetoric, are still searching for the next unicorn. The result is a tragic waste of time and talent, as some of the brightest minds in climate tech find themselves spending the majority of their time on fundraising, not on further developing their innovations.
This dynamic is especially troubling in light of the stark reality of entrepreneurship: Most startups fail, and most VCs do too. The failure rate of startups across all sectors is notoriously high, with over two thirds never delivering a positive return to investors. Given the long development timelines, complex regulatory landscapes and often-unclear pathways to profitability of climate tech companies, achieving success is an even more challenging tasks in comparison to other startups.
Yet the system remains fixated on the allure of the few who succeed, ignoring the many who do not. This is especially problematic in climate tech, where the stakes are immeasurably high. The urgency of the climate crisis cannot be overstated, and it is this urgency that should drive our approach to climate tech innovation. These are not companies built to turn a quick profit; they are endeavours born out of necessity. These innovators — typically academics, researchers and engineers — are motivated by the urgent need to address the core challenge of our time. We cannot afford a “business as usual” approach to entrepreneurship and investment in the face of this crisis.
This begs the question: What should universities be doing differently?
A Better Approach to Fostering Climate Tech Entrepreneurship at Universities
There are a number of ways that universities can better support climate tech entrepreneurship among their students and faculty. They should start by adopting a critical approach to the traditional investment models they currently endorse. Instead of defaulting to the well-worn path of typical venture capital, they should explore alternative ownership structures that might work better for these emerging entrepreneurs, such as cooperatives, steward ownership, multistakeholder governance or post-growth entrepreneurship, then actively implement them. These structures — which remain virtually unheard of in the current climate tech business space — emphasise long-term growth and impact rather than short-term profits and exits, and shift decision-making power away from investors to include a broader group of stakeholders. Alternative ownership models can better support many climate tech startups, allowing them to access finance and governance support without diluting their core focus on developing their products and identifying potential public and private clients.
Moreover, universities must recognise that not all inventors are natural entrepreneurs. The one-size-fits-all approach to entrepreneurship education is inadequate for those whose primary goal is not profit but impact. These individuals should not be forced into the VC-driven startup mold. Instead, universities should provide:
- Access to more government grants.
- Direct connections to potential public and private clients that might purchase their inventions.
- Access to legal and business advice.
- Support in organising pilot projects for alternative ownership and financial models.
It’s essential to recognise that not all universities approach innovation and entrepreneurship similarly. And though this article critiques the conventional venture capital model, it’s also important to note that the VC landscape is not monolithic either, and there are signs of change. For example, the growing trend towards impact investing within the venture capital industry shows that many investors are increasingly focused on funding ventures that generate social and environmental benefits alongside financial returns.
As these trends suggest, universities have a unique opportunity to transform the debates on climate finance and entrepreneurship. They should leverage their position as knowledge centres to challenge the mainstream mindset, promoting investment models that prioritise long-term impact over short-term profit. This would not only benefit climate tech entrepreneurs, it would also influence how investors approach innovation in other critical areas.
As currently structured, many universities’ business innovation ecosystems sell dreams rather than solutions. Education programs are filled, incubator classes are packed, and yet hundreds of bright ideas are discarded in the relentless pursuit of the next big exit. This is not just a loss for the entrepreneurs involved but for all of us. In the face of a rapidly escalating climate crisis, we cannot afford to waste time on a system that fails to deliver the urgently needed solutions.
The role of universities in promoting climate tech innovation must be reexamined. It is time to create an environment where true innovation — driven by a genuine desire to address the climate crisis — can thrive. Our future depends on it.
Emre Eren Korkmaz is a researcher at the University of Oxford and founder-director of OCTD, a research and consultancy company with a focus on data scarcity and impact measurement.
Photo credit: Vlada Karpovich
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