How a Climate Tech Company Embedded its Mission into its Legal Form

1. Embed values into the product and the company from the beginning

Davida wanted to create a business oriented towards all of its stakeholders, not just its investors. She defined the company’s values and put them forward early on, emphasizing how the tech was built in partnership with the communities it was designed to serve. Aclima’s granular data helps show the racial implications of environmental justice.

“If you’re Black in the US you are 3 times more likely to die from exposure to air pollution.” — Davida Herzl

“Understanding how pollution is distributed across the population is an important part of shaping policy interventions,” said Herzl.

2. Prove the technology works before raising funds

Aclima spent years demonstrating their ability to build its technology. “For years we didn’t bring in any investors; we bootstrapped with revenue. It was hard to raise money at the time, and there was a significant risk in bringing on misaligned investors.” Only around 2017 did Aclima start to consider outside capital, and by then, more impact investors active in venture had emerged.

3. Raise from aligned investors who value the mission (Series A)

In June 2018, Herzl closed Aclima’s $24M Series A. The round brought together a group of impact-focused investors, including Radicle Impact (part of Tom Steyer and Kat Taylor’s family office), the Emerson Collective (the organization run by Laurene Powell Jobs), and the former Google CEO Eric Schmidt’s family foundation.

4. Re-incorporate as a Public Benefit Corporation (Series B)

When Davida was gearing up to raise Aclima’s Series B, she knew she would be bringing on investors that she didn’t know as well as those on the Series A cap table. She wanted to make sure that her investors would get behind the company’s mission, and leaned on the process of re-incorporating as a PBC to filter out investors who weren’t on board.

PBC now core to Aclima’s GTM strategy

“It’s put us in a place where we can be bolder about our commitments to the communities we are serving. It’s enabled us to make this focus visible, where we previously felt we had to be more conservative. It’s important to us to be an example of how you build a company for the future,” said Herzl.

“It gives us a competitive advantage in the sales process. Our clients know we’re in it to help government agencies solve profound societal problems.”

Herzl is particularly excited to share Aclima’s story to show that the decision to incorporate is no longer binary.

Stay tuned for more micro case studies of founders who choose to put values, ethics, and social responsibility first while building their technology companies.

If you have a story to share yourself, drop us a note at startupsandsociety@gmail.com or follow the project on twitter: @startupsandsoc. If you work in tech and want to self-evaluate your own ethical practices, take our brief survey here.

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