Third Derivative

Date: 2022

Asset Class: Venture Capital - Patient, Catalytic Capital

Description:  Third Derivative (“D3”) is a global climate technology non-profit accelerator working to scale climate tech innovation and accelerate the global energy transition. The program works with early-stage, climate technology start-ups around the world to connect them with the resources needed to commercialize and scale. The Fund invests in companies around the world at the pre-seed and seed stage via $100k convertible notes. The Fund Third Derivative was founded in 2020 by RMI, a Colorado-based nonprofit “think-and-do” tank whose mission is to transform global energy use to achieve a clean, zero-carbon future.

Why We Invest: Innovation is needed to help minimize the effects of climate change. D3 is part of an inclusive ecosystem RMI intentionally created that is meant to accelerate funding to promising startups in sectors where innovation is most needed. RMI created the D3 Accelerator Program to address a gap in support and funding for climate tech entrepreneurs bringing new ideas and innovation to market. D3 is pairing technical assistance and mentorship with their network of corporations and investors to bridge finance and resource gaps and help climate startups scale to tackle the climate crisis.  This is considered catalytic as it supports this RMI ecosystem and the Fund “carry” flows back to RMI.  It is considered patient capital, as the fund length is 12 years, slightly longer than a typical venture fund.  That said, our experience with Prime Coalition has shown that patient, catalytic capital can still deliver solid returns given the enormity of the climate crisis and the momentum toward adopting innovative solutions.