#91 How Keyframe is Bridging the Gap from Pure VC to Pure PE Financing for Hard Tech COs w/ Ethan Goldsmith

Today we have a pretty interesting capital provider joining us. Ethan Goldsmith is an Investment Partner at Keyframe Capital and helped found TeraWatt Infrastructure (the fleet charging behemoth). We went through the usual stuff around his background, early career, what they are doing, how they source deals, and their unique points but the core of this conversation in my opinion is really in their model. Since their inception, they saw that ClimateTech would require more flexible capital structures given that the pure equity model wasn't going to work given how capital-intensive most of these technologies are. They set up their fund to include those flexibilities. As an example, they might find a firm that is in need of funding, they could write a check in return for equity, but then in a few months, they might issue a specific project finance product for that use case. If the portfolio company needed to raise that in the form of equity for dollars, they would quickly be eradicating their cap table space. This to me is the most important aspect of this entire conversation and I'm glad we had the chance to speak with Ethan to go through it. There are other interesting topics here but this is key for other fund builders to consider. Enjoy the episode! Topics: 1:57 Intro 7:35 What led them to recognize the infra -- VC Gap 14:27 Getting into PE/VC 19:13 Building TeraWatt 24:47 Key Takeaways from starting TeraWatt 26:47 Differentiating their model through flexible capital 31:36 Their Verticals 38:11 Managing deal flow 40:58 They spend a lot of time in the market before investing because of their model 42:32 How they help their portfolio co's 45:45 Advice to hardware and capital-intensive startups in ClimateTech 48:36 Obvious Prediction 50:47 Final thoughts Links: Connect with Ethan: https://www.linkedin.com/in/ethan-goldsmith-186b3627 Keyframe Capital Website: https://www.keyframecapital.com/ Check out our Sponsor, NextWave Partners: https://www.next-wavepartners.com/ Join the Slack Channel: https://cleantechies.slack.com/join/shared_invite/zt-pd2drz6d-N~9nURU5JlyMXv2ZiO5bAQ#/shared-invite/email Follow CleanTechies on LinkedIn: https://www.linkedin.com/company/clean-techies/ HMU on Twitter: @silasmahner __________ We are proud to continue working with NextWave as our official show sponsor for this podcast. NextWave and all of its staff are highly motivated to advance the ClimateTech revolution and are constantly innovating ways that they can help affect that transition. From experts in the talent space to ESG experts, NextWave is taking on Climate and Social responsibility head-on and helping companies build great cultures that not only make the world a better place but also increase workplace satisfaction. Reach out to NextWave Partners today to learn more about how we might partner with you today. https://www.next-wavepartners.com/ / Support the show If you're gonna change the world, you're gonna need a world-class team. Partner with ErthTech Talent to help you do that, for less. 70+ Placements 5+ Years (exclusively in CleanTech) The Lowest Fees in the Market (12-15% of first-year salary) 90-day placement guarantee It's really hard to say no to that. Wait?! -- The best service is also the cheapest? Seems too good to be true, but it's the entire reason we started this company. We believe that Climate entrepreneurs are doing important work, and there should be a firm to help them find the best talent, without it breaking the bank. Reach out today for a free assessment of your hiring process. [email protected]