Step 1: Separate the company from the projects
Many climate businesses have two money needs: building the product and team, and paying for physical deployment such as sensors, retrofits or energy assets. Equity investors generally fund the first. Deployment is often better funded later with debt, leasing or project finance. Mixing the two in one ask makes a round look larger and riskier than it is.
Step 2: Use non-dilutive funding to de-risk the technology
In the UK, innovation grants and competitions can fund early research and demonstration work. Treat them as a way to reach milestones without giving up equity, but plan for application timelines and match-funding requirements. Investors like to see grant wins as independent validation, though they will not see grants as a substitute for customers.
Step 3: Prove impact in numbers you can defend
Decide how you measure the result — energy saved, emissions avoided, waste reduced — and use a method a customer's sustainability or finance team would accept. Avoid headline claims you cannot evidence; investors and buyers are wary of greenwashing, and regulators increasingly are too.
- A clear baseline and measurement method.
- Pilot results verified by the customer or a third party.
- A link between impact and money saved or risk reduced.
Step 4: Turn pilots into contracts
Climate buyers — utilities, property owners, manufacturers, local authorities — often run long pilots. Agree success criteria and a commercial next step before a pilot starts, so a good result becomes a paid contract rather than another trial.
Step 5: Find patient, aligned investors
Look for investors with a climate mandate or experience with longer sales cycles and hardware. Explain where AI adds leverage — forecasting, optimisation, monitoring — and where the physical world sets the pace.
Matching climate tech funding sources to stages
| Stage | Typical funding | What you need to show |
|---|---|---|
| Research and prototype | Grants, innovation competitions, angels | Technical feasibility |
| Pilot and first customers | Pre-seed and seed equity, grants | Measured impact and a paying buyer |
| Scaling the company | Seed and Series A equity | Repeatable sales and margins |
| Deploying assets | Debt, leasing, project finance | Predictable returns per project |
Questions to prepare before you pitch
- How do you measure impact, and would a customer's auditor accept it?
- What part of your ask funds the company, and what part funds deployment?
- Which regulations or incentives does your model depend on, and what if they change?
- How long is your sales cycle from first meeting to signed contract?
- Is the customer paying for savings, compliance or reputation?
How KJ Enterprises evaluates climate tech businesses
KJ Enterprises looks at climate businesses where AI makes an existing process measurably cleaner or cheaper, the buyer has a financial reason to pay and the founders are honest about how long deployment takes.
If that describes your company, you can apply for investment. Related reading: the complete climate tech funding guide and how to raise for a robotics company.
Frequently asked questions
Can I combine grants and equity in the same year?
Yes, many climate startups do. Check each grant's rules on match funding and eligibility, and keep investors informed about any obligations attached.