Rally | Shawn Xu on Investing in Climate
The Lowercarbon Capital Partner shines a light on sustainable investments
RALLY with Gold House Ventures is excited to spotlight exceptional Asian Pacific founders and investors through a biweekly feed of stories, funding opportunities, portfolio news, career opportunities, and events. If you are an entrepreneur looking to meet with Gold House Ventures or an investor looking to get more involved with Gold House’s Venture Network, please reach out to investments@goldhouse.org.
Investor Spotlight: Shawn Xu from Lowercarbon Capital
We’re excited to spotlight Shawn Xu, Partner at Lowercarbon Capital. Before he was an investor, Shawn was a startup executive who led international expansion for companies such as Square. Shawn is also involved in political activism, and previously served as a tech policy advisor to California Governor Gavin Newsom. Shawn is a graduate of Wharton and the Lauder Institute at the University of Pennsylvania, but more importantly, a passionate advocate for builders and dreamers everywhere and the best dinner party host west of the Mississippi.
What types of startups do you typically invest in, and what do you look for in a potential investment? How do you determine whether a startup is a good fit for your portfolio?
We’re entirely focused on unf*cking the planet, which means we only back companies that fight climate change. We’ve raised billions of dollars to write the first checks into a generation of companies that are slashing CO2 emissions, sucking carbon out of the sky, and buying us more time. We aim to be first believers.
So, that means we’re really excited about the inevitable energy transition to renewables and batteries, the electrification of everything, the development of commercial fusion (we have a fund that exclusively focuses here), the emerging carbon removal industry (we have a fund that focuses here too), technologies that can mitigate natural disasters (read: wildfire, drought, flood, etc), and much more. We’re talking about enabling another industrial revolution, and getting on the ground floor of the most valuable companies of the 21st century.
Can you tell us a little bit about your investment philosophy & approach?
The concentration of CO2 in the atmosphere is higher than at any point in at least the last four million years, and it is directly a result of human activity. More carbon means more heat, and more heat means more death. Solving the climate crisis is the most important challenge of our time.
At Lowercarbon, we believe the way out of this crisis will not be policy, philanthropy, or cultural change in a vacuum. They certainly help, but at the end of the day, we need technology solutions that can meet the immense scale of the problem. We will not invest in companies that depend on customers to buy a product out of moral principle. Instead, we’re looking for companies that are cheaper, better, faster to begin with that also happen to be good for the planet.
In my opinion, “investing in climate” in the 2020s is analogous to “investing in the Internet” in the 1990s. There is no such thing as an “Internet” industry today — it’s something that now touches every aspect of our economy and is in fact integrated into every business model. Similarly, there is no such thing as a “climate” vertical — we’re talking about redesigning modern society in ways that optimize for energy independence, food security, decarbonized infrastructure, and more. It’s not just us who believe this, Blackrock’s CEO Larry Fink believes that the next 1,000 unicorns will be built in climate tech.
What inspired you to become a venture capitalist, and what motivates you to keep working in this field?
I grew up in Silicon Valley, a few blocks from the startup garage where Jobs and Wozniak built the first Apple computer. I’ve been around entrepreneurs and innovators most of my life — nerds with their own language living in the future obsessed with building a remarkable world that no one else could quite see yet.
Becoming a venture capitalist, especially one focused on climate tech, has allowed me to return to the original optimist ethos that I was introduced to as a kid. Every day, I get to serve courageous founders making bold technology bets that, if successful, can improve society. To me, this is the best job in the world.
Would a “younger you” be surprised by your life now? If you weren’t working in VC, what would you be doing?
My earliest intellectual obsession revolved around studying globalization and playing a part in making the American Dream a global one. So, I began my career as a startup operator focused on international expansion. I spent a chunk of my twenties launching new markets abroad for rocketship technology companies like Square, which in practice meant living out of a suitcase across a dozen countries. Let me tell you, it was the best kind of adventure. I came back with the craziest stories - there’s one about my time in North Korea that I’ll have to tell you off the record over a beer.
A part of me still wants to go back to this work, but I don’t think my younger self would be too surprised by the shift I’ve made. The questions around the climate crisis will soon become the defining geopolitical issue of our lifetimes, and venture capital is an important mechanism by which we address them. As an operator, I would work on just one solution to one problem at a time. As an investor, my perch affords me a bird’s eye view, betting on many solutions to many problems at a time. It’s meaningful work.
Can you tell us about any personal struggles or challenges that you faced while pursuing your career as a VC? How did you overcome them?
I belong to a close-knit immigrant family that means everything to me. I grew up folding dumplings at the dinner table, each time listening to three generations under one roof share a century’s worth of family stories through the lens of opportunity, struggle, and perseverance. I feel an intense obligation to be of service that maybe only those who grew up this way can fully appreciate.
As tragically happens to so many families, one of my parents got sick and our whole lives changed. In our case, my dad was diagnosed with Parkinson’s Disease and, within the last several years, has become mostly disabled. My mom, brother, and I became my dad’s caregivers - a physical and mental load stacked on top of everything that goes into navigating a career in Silicon Valley.
It’s hard. There are days where my back hurts from lifting him in and out of his wheelchair, and nights where I’m emotionally exhausted. There are a lot of meetings I’m late to because I have to help with something around the house first.
This isn’t something you overcome, it’s something you integrate into your life. And I’m happy to do it, because I love my dad. This would have been impossible to do alone - I’m fortunate to have a family that has all come together on this. And luckily, I have been part of super supportive teams that’s never given me sh*t for it. At the end of the day, it’s made me appreciate the little things in life that we often take for granted. I’m a lucky guy.
What advice do you have for founders who are raising? Which key qualities do you look for in founders?
I look for exceptional storytellers and builders who can clearly articulate the inflections that power their “why now” and show evidence that they’ve uncovered a true “earned secret” (for more on this, I suggest spending time with my old mentor and OG seed investor Mike Maples at Floodgate, or read his upcoming book Pattern Breakers which goes into detail on this special framework for 0 to 1).
But more than that, I’m looking for entrepreneurs who treat their company as their life’s work. If you’re a founder, you’re a special breed of talented hustler. You can do so many interesting things with your time. I want to know why, in your heart of hearts, you care about spending a large chunk of your life working on your particular problem. When the going gets tough, I want to understand what motivates you to keep pushing through.
Who are some stellar Asian Pacific founders and their startups we should look out for?
A few years back, 25% of all venture capital dollars started going to climate tech startups. That’s insane! There are now some really impressive companies in our category that have Asian founders at the helm. Here are a few:
Gaurab Chakrabarti @ Solugen: producing low-carbon industrial chemicals with enzymes, $2B valuation
Yet-Ming Chiang @ Sublime: developing zero-carbon cement, raised $133M
Quoc Pham @ Electra: developing zero-carbon steel, raised $85M
Shashank Samala @ Heirloom: built the first commercial direct air capture plant in the US for carbon removal, raised $57M
Mary Yap @ Lithos: accelerating carbon removal through enhanced rock weathering, won $57M contract from Frontier
Alisha Fredriksson @ Seabound: invented mobile carbon capture for ocean-going cargo vessels
My advice - join these rocketships early. If you want an intro, shoot me a note.
What advice would you give to aspiring VCs who are looking to break into the industry, particularly those from underrepresented backgrounds?
You’re going to want senseis and serendipity.
Venture is an apprenticeship business, so early on I’d optimize for the best sensei over titles and pay. I was incredibly fortunate to spend time with some legendary investors, particularly Ann Miura-Ko (once called “the most powerful woman in startups”) as well as Chris Sacca (founded the best performing venture fund of all time) and Crystal Sacca (another badass Asian female investor and NYT best-selling author). Find people who you can learn from and who are willing to co-sign your career.
Learn to thrive on serendipity. It’s better to be lucky than good - I used to believe that you couldn’t control how lucky you get, but I’ve since internalized that luck really is just where preparation meets opportunity. Increasing the surface area where you can get lucky is therefore key. For me, that meant being in San Francisco in the heart of the action, and figuring out ways to meet extraordinary people there. Create your own opportunities! Host the dinner, pull together the happy hour, organize the hacker house, etc.
There’s a lot more to share here but I don’t want this to become an essay. If you ever want to get in touch, feel free to shoot me a note at shawn@lowercarboncapital.com. I’m always happy to help.
Upcoming Gold House Network Opportunities
Join our Gold House Futures Network – a curated community of the most promising next-gen API creatives, entrepreneurs, and social impact leaders! By being part of the network, founders receive:
Amplification: Members of the Futures Network receive resources from Gold House’s corporate and cultural leadership network to accelerate their ambitions.
Collaboration: From business partnerships to soundtrack inclusion, Futures gain access to collaboration opportunities both within the network and with industry leaders.
Community: Exclusive events and curated programming cultivate a community of founders and creators.
Our recent survey found that 94% of founders were likely to recommend the Futures Network to other founders citing a supportive API community and expansive network. Apply to join our Futures Network here!
RestorAsian Scholarship Fund: Last year, Anise Health launched the RestorAsian Scholarship, dedicated to making mental health services more accessible. Based on the demand of applicants, Anise Health is working with Asian Mental Health Project, a 501(c)(3) non-profit to renew this scholarship. Help them raise $20,000 to launch the next cohort of RestorAsian Scholarship in May 2024 here.
Thinking about your next move?
Vividly is seeking a Solution Engineer, DevOps and Internal Tools Engineer, Sales Engineer, Associate Customer, and Success Manager to join their team in automating trade promotion management for the consumer packaged goods industry.
Music AI is seeking a Head of Engineering, Head of Design, Product Manager, and Devs (Full Stack, Concept) to join their team building the online home for emerging music creators and interactive consumption experiences using generative AI.
Osmind is hiring an Engineering Manager to join their team building the digital infrastructure for the next era of mental health. Email lucia@osmind.org for more info.
Cocofloss is seeking a Head of Finance to join their team in delivering high-end oral products.
Wins to Celebrate
Immi launches cup ramen, the world’s first low carb, high protein, and plant based reinvention of the nostalgic cup noodles you remember and love.
Boomerang onboards over a dozen new sport venues to digitize the lost and found process.
Demi launches in two new buildings in Chicago to modernize composting.
MedSetGo deploys its one-stop shop platform for at-home and near-home outpatient health services into 100 health practices in Las Vegas.
What’s Popping?
🌟 M13 x Gold House Ventures x Gunderson AAPI Founder Happy Hour: Celebrate AANHPI Heritage Month with M13, GHV, and Gunderson at Gunderson’s offices in LA on May 16th. Space is limited; email megan@goldhouse.org for more info.
🍎 NYC Tech Week: Get ready for our official announcement for our NYC Tech Week event! It’ll be a fun evening with top Asian Pacific founders and funders, live performances, and a dance floor for a bit of our Gold House flair. More details will come soon, but for now, save the evening of Thursday, June 6th in Manhattan!
🏃🏻♀️ AAPI 5K: AAPI 5K is a community-driven event that promotes health, unity, and cultural diversity while celebrating the vibrant Asian American and Pacific Islander community. You can run and walk in 5 cities - Boston, Houston, Los Angeles, New York, San Francisco & West Hartford - to celebrate AAPI Heritage Month! Gold House is a designated nonprofit partner and will receive a portion of proceeds for your participation. Sign up now!
🔥 We’re curating a list of the best community events celebrating AANHPI Heritage Month in May! DM us @goldhouseco everywhere or email investments@goldhouse.org with any hot tips
Ideas? Questions?
Let us know in the comments below!