Last month my colleague Miriam Partington and I published the results from our reader survey on founders’ mental health. The responses made for pretty bleak reading — with more than half of the respondents telling us they’d experience burnout last year.
As I dug deeper into the findings one data point stood out to me: 63% of climate tech founders rated their mental health as ‘bad’ or ‘very bad,’ up from 53% when we ran the survey last year — and higher than the 43% of other founders who told us the same.
Elsewhere in the data, 46% of climate founders said they were considering leaving their startup in the next 12 months, compared to 39% of other founders.
I wanted to know why the data skewed more negatively towards climate tech founders. After all, the last few years have been tough for a lot of founders seeking money from investors — with the number of active VCs in Europe down by 30% since 2022.
Geopolitics adding to their troubles
Many survey respondents cited geopolitical factors as a reason for their lows.
“We work in ESG — Donald Trump’s win affected the European green agenda, and major lobby groups in France and Germany have begun attempting to remove ESG requirements and legislation from European enterprise,” one respondent said. “This means that our market is uncertain and is under threat of collapsing.”
Another respondent said that Trump’s appointment was “wiping out opps and investment in the climate space,” adding that “it regularly feels unsurvivable.”
One simply told us that their investor withdrew after Trump was elected.
Those concerns look far from over. Last week Breakthrough Energy, the climate philanthropy organisation founded by Bill Gates whose venture arm has backed European startups such as Mission Zero and Heart Aerospace, let go of all its staff in Europe and closed its policy and advocacy office.
The war in Ukraine was also mentioned as a factor putting pressure on climate tech founders. One respondent said: “Climate investments have suffered since the peak in 2021/2022. Private companies are struggling to prioritise climate investments, e.g. due to increasing inflation, war in Ukraine, energy costs, etc.”
Another added: “’Well defence tech is in and climate tech is out :).”
A tricky investment structure
Alastair Collier, founder and chief research and development officer at climate tech firm A Healthier Earth told me that the investment cycle also adds to climate tech founders’ woes.
“You’ve got unrealistic expectations of the financial returns, which create unrealistic pricing for whatever climate products you’re producing,” he said, citing risk premiums as particularly challenging for founders wanting to scale.
Collier, who was diagnosed with severe anxiety in 2021, said that his work in climate tech made it “very easy to worry about the future,” adding that one future worry was always, “am I going to get the money to do what I need to do?”
A lot of climate techs also require a lot of money to fund infrastructure projects — such as carbon removal plants and battery factories. “SaaS is 10 people in a coffee shop with beanie hats and a laptop writing some software, and revenue can come in from day one. Climate tech’s not like that — climate tech revenue is coming in in year three,” Collier told me.
A Healthier Earth was acquired in 2023, and Collier said he feels lucky that he doesn’t need to contend with the current pullback of institutional capital from climate tech funds. In 2021 and 2022, each new week felt like it brought a new climate VC.
Three years later, those VCs find themselves in a very different environment. Capital is far less free-flowing and the climate tech sector faces significant setbacks, from reduced will for the transition, to the bankruptcy of Europe’s highest-valued climate tech, Northvolt. Despite climate tech being the most funded vertical in 2024, funding was also 47% lower in H2 than H1.
Christina Richardson, founder of London-based coaching community for founders Foundology, said that over the past few years “the funding landscape has really shifted for climate tech founders, where they have no choice but to raise, they can’t get to profitability. It is just a harsh reality to be in […] and it’s requiring them to pick themselves up again and again and again.”
Victims of the passion paradox
What really stood out for me, though, is the relevancy of the passion paradox: where deep personal engagement with a mission can drive performance and burnout. This is “particularly high” for climate tech founders, Richardson told me, as their commitment to tackling the climate crisis isn’t just to cash in; it’s deeply personal, making it harder to set boundaries and step back.
It doesn’t necessarily mean you’re working all the time, either. Collier spoke about feeling “constantly bombarded” by reminders of carbon emissions, and never being able to properly “switch off” from work.
“The depth of the anxiety was in my everyday. I couldn’t go on holiday and be happy because I knew the carbon emissions of the flight. I felt bad that I was giving my children the opportunity to see Greece because I knew the carbon emissions of doing that.”
With hindsight would he have become a climate founder? “I would choose to do something easier. I think that sounds like a really defeated answer and that I’m a terrible person, but I think I probably would.”
And readers, I want to hear from you. Have investors pulled out of deals since Trump’s been elected? Has your understanding of the climate crisis adversely affected your mental health? And investors, what are you doing to support climate tech founders from these unique pressures? Get in touch here.
Read the orginal article: https://sifted.eu/articles/climate-tech-founders-are-unhappy/
