Part 2 - John's Carbon Flex from the seller's perspective
September 09, 2022
In my last update
about purchasing a first ton of carbon, John Sanchez was buying the first ton of carbon removal from a startup. Now the purchase is complete, John bought the first ton from Cedar Carbon
I caught up with Cedar Carbon's CEO Ryan McIntosh to get his thoughts. You can check out the video here (20 min).
Here's my takeaways from Cedar Carbon about selling their first ton:
- Validation from a first customer at the early stages of a company helps with encouragement and a little money
- Included in their pitch deck to an investor, sparked a few questions (they did get their first investor, unclear if the sale was a factor)
- Made their own draft agreement, could be used by others.
- Delivery to be determined. What requirements do buyers and sellers have?
- Simple Agreement for Future Carbon (SAFC): What's the simplest way to buy carbon removal credits from startups?
- Interested in selling another 100 tons to early adopters. Additional funding, similar to crowdfunding
- It forces the team to account for their carbon, how much are they removing with prototypes, when can they actually remove 1 ton?
Here's my takeaways overall, having bought 3 of these first tons from startups and told people about it over the last few weeks:
- For buyers, the flex is powerful, taking part in carbon removal innovation and learning along the way.
- For startups "at least one person in the world doesn't think we're completely insane" can be crucial at the early stages for motivation or even to put into their pitch deck
- May help early teams break out of the "gigaton thinking trap"
- For investors, these small purchases may seem like a distraction for the team or noise in their own diligence process.
- For startups, a few hundred dollars may be too small to make a difference. In my experience crowdfunding is best for getting hype and launching a new product but the short term financial returns are weak.
There's something here, though still emerging. It's not clear yet what this all adds up to, if anything. Small $500 experiments can be the catalyst for the next big thing, and no one yet has a solution to how we remove billions of tons of carbon dioxide from the air economically.
Curious for any thoughts you have on this!
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