How to Get Funding and Grants for Green Startups

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As an eco-entrepreneur, you’ve got options to get funding that will grow your green business and protect the planet, while still encouraging economic development.

Because it impacts every other humanitarian cause, global warming is arguably humanity’s biggest crisis. With a scorching summer in the Pacific Northwest and more intense Saharan dust storms, it’s clear around the globe that global warming is now accelerating.

But at the same time, businesses are stepping up to the challenge: 90% of Generation Z believes that companies should help address environmental justice issues. It’s no wonder that 74% of investors plan to increase their investments in ESG funds, which include businesses fighting climate change from every conceivable angle. This means that there is money up for grabs to help you bring your vision to life.

Here’s how to secure funding as an eco-entrepreneur.

1. Build relationships with other sustainable-business founders

Other startup entrepreneurs, particularly non-competitors, can open new doors for you and introduce you to contacts from their VC backers and accelerator programs.

You could visit a shared office space like the Green Exchange, a community of businesses in Chicago devoted to environmental sustainability, or join a group like the Western New York Sustainable Business Roundtable, which holds events for sustainable businesses in the Buffalo-Niagara region.

And of course, harness the power of online networking. Don’t be afraid to reach out directly to business owners you admire and share what you’re working on. For best results, engage with their content on social media before popping up in their inboxes.

2. Apply to sustainability-focused accelerators

An accelerator will give you resources to help you launch your business. Often, this entails access to mentor coaching, equipment and even investors who will welcome a pitch from you.

Don’t count yourself out of eco accelerators just because you’re not a clean energy startup. There are accelerators for other types of businesses too, including food innovation, sustainable fashion brands and other green consumer products.

Here are some of the best startup accelerators for eco-friendly companies of all sorts:

You can also do some market research and check if any of your favorite eco brands participated in an accelerator program. They’ll often share this information on their about page or press page.

3. Nail your pitch deck with the right stats

The green tech and sustainability market size is predicted to grow from $11.2 billion in 2020 to $36.6 billion by 2025. That’s an annual growth rate of 26.6%. Use this massive growth to your advantage to prove incoming demand. Make sure to drill down and find statistics for your specific niche. For example, 59% of Americans are interested in sustainable food.

The statistics you find will paint the picture of urgency and growth for investors who might be new to funding eco businesses. After all, your funding could come from investors looking to break into this opportunity, not just those with a big roster of sustainable companies already.

4. See if you qualify for grants or government funding

Is your company on the research and development side of things? Most government grants are aimed at companies that help address construction waste, water waste, structural longevity, recycling, food sustainability, and other planning concerns.

On the federal level, the Environmental Protection Agency offers small business grant opportunities for companies building green infrastructure and innovating food systems. Many state and city municipalities have their own programs you can apply to as well.

5. Consider small-business loans

Maybe you want to launch a small business focused on energy efficiency quickly, without having to court investors. If you’re building a B2C business that you expect will turn a profit reasonably soon, then a small business administration loan might be the right choice.

Small-business funding is usually a good fit for eCommerce companies capturing important eco trends and local businesses like zero-waste grocery stores. Your local credit union will often have the best rates, or you can check with a company like Lendio. Remember you do have to pay it back, so be cautious about what you borrow.

As more and more consumers wake up to the urgency of the climate crisis, the demand for your company and renewable energy will grow. Get that funding and keep innovating.

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