Don’t Call It a Comeback

Kyle saved it from Dumas’s announcement post, whose summary line was that if your investment thesis depends on who wins an election, “you might want a better thesis” (Lots of people have reached… (tweet)). It appeared the same week as The Sequoia of Tomorrow and Is Private Equity Cooked?, another firm’s statement of strategy in the days after the election.

Summary

The post is a short, punchy response to the question Lowercarbon’s partners say they were fielding for 36 hours after the vote: were the midterms good for Lowercarbon?

• The election, briefly. The authors describe the night as a Democratic wave: Texas went blue in all 17 statewide races, Kansas elected a Democratic governor and Mississippi a Democratic senator. But asking whether that was good for “climate tech” misses the point.
• Founded under the opposite conditions. Lowercarbon was started during the first Trump administration, on the bet that the economics already favoured clean energy regardless of rhetoric. Their example: Texas already had more solar, wind and battery jobs than oil and gas jobs. Solar deployment has since accelerated, and batteries have become cheap enough to put in one-way drones.
• The portfolio as evidence. A decade on, the firm backs 150 companies working on abundant power, domestic manufacturing and resilience. They operate in red, blue and purple districts across more than 25 states, and more of them hold contracts with the Defense Department than with the Department of Energy. Attacks on pipelines and blockades of shipping straits, they argue, make domestically produced energy, machines and chemicals more popular across the spectrum.
• Strip the word “climate.” The companies are climate solutions, but also national-security, economic-opportunity and energy-affordability solutions. Remove “climate” from every description on their website and it still reads as a list of things the world needs.
• Pragmatism over politics. For every policy step backward, private markets found a way to take two forward with products that are better, faster, cheaper, more reliable and have shorter supply chains. Physics is nonpartisan: no resolution alters thermodynamics, and no executive order reverses a drought.
• What voters said, and what winners must do. They read the vote as a rejection of high electricity bills and diesel costs, of wars fought over oil, of offshored jobs, and as support for clean air and water. The winners now have to deliver: more baseload electricity, lower household energy costs, more resilient infrastructure, domestic jobs and less dependence on foreign energy. The closing line: “So, yeah, it was a good week for Lowercarbon.”

Notable quotes

“Electrons remain unaffiliated with any party.”

“No congressional resolution can alter the laws of thermodynamics.”

“Go ahead and strip the word ‘climate’ from the description of every company on our website.”

Full text

Connections

• Lowercarbon Capital · Chris Sacca · Clay Dumas
• Climate Change · Climate Tech · Energy · Solar · Nuclear Energy: the sector.
• American Dynamism: the overlap with defense, manufacturing and reshoring the post leans on.
• Politics: the thesis that a durable investment case should not hinge on an election.
• The Sequoia of Tomorrow · Is Private Equity Cooked? · Two Ways to Build a Firm: the same week’s other firm-strategy pieces, published around the midterms.