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Community Event: Turning First-of-a-Kind into a Funded Functional Reality

Deploying a first-of-a-kind (FOAK) climate tech project can feel like threading a needle in a windstorm. If you're navigating this stage, you know the stakes: financing hurdles, risk stacking, and the constant dance between building trust and showing traction. In our May 2025 Community Event, we went deep with operators and funders to strip away the fluff and get straight to the tactics.

This is now Enduring Planet, Planeteer, & Friends’ seventh of our monthly “Financing Your Climate Startup” Community Event Series. If you missed our first six, we highly encourage you to go back and read the teardowns on the Enduring Planet Insights page.

Speakers:

Dimitry Gershenson, CEO, Enduring Planet (moderator)
Hannah Friedman, Venture Partner at Planeteer and Head of Partnerships at Mark1
Jennifer Holmgren, CEO, LanzaTech
Christian Okoye, Investor, Generate
Patrick McGrath, Program Director, The Schmidt Family Foundation

Summary Notes

How should founders approach early planning for their FOAK project development?

Start by sequencing risks. Don't try to de-risk everything at once — instead, identify the biggest existential risks (tech feasibility, supply chain readiness, permitting) and chip away at them methodically. Pilot and demo projects should serve as trust-building assets, not just tech validation - and early customer engagement or on-site deployment can be critical elements. The strongest developers build early credibility with stakeholders by:

Partnering with experienced EPCs (engineering, procurement, construction)
Creating “lift and shift” models that move from FOAK to NOAK (next-of-a-kind)
Building in local context—think labor, permitting, and community readiness

Where possible, co-develop with strategic partners who bring more than just capital—look for those with operational experience or aligned deployment incentives.

What makes a FOAK project “investor-ready”?

Investors evaluate both the tech and the team—but often lean on a developer’s track record more than novelty. To build trust:

Provide performance data, even from smaller-scale pilots or predecessor projects
Standardize processes and timelines to give confidence in execution
Show clear commercial traction, including early offtake or customer LOIs

Avoid being vague about timelines or costs. Uncertainty is the default in FOAK—your job is to show where it’s already been reduced and to level-set expectations about potential overruns in advance and with mitigation strategies already in place.

How do catalytic funders evaluate FOAK project potential?

Catalytic investors (foundations, family offices, mission-driven funds) look beyond traditional ROI. They focus on:

Coalition-building efforts (local partners, NGOs, public-private teams)
“Lowering the activation energy” for future funding or deployment
Ability to step in and cover risk that other capital or stakeholders can’t
Implications on local communities, and the market at large (i.e. if we de-risk this project, does it move the entire ecosystem forward)

Catalytic capital can take many forms: anchor grants, milestone-based funding, concessional equity, guarantees/insurance, or first-loss capital. But it only flows when founders show intentionality about the capital stack.

What’s a realistic cost of capital for FOAK projects?

Expect early-stage FOAK deployments (especially at TRL 7-8) to come with growth-equity-like capital costs of 20–30%. This can come down as you de-risk through:

Demonstrated tech performance
Credible cost modeling with EPC partners
Secured offtake or long-term customer relationships

Stacking blended capital (e.g., philanthropic grants plus venture debt or equipment financing) is often the only viable path. Founders should prioritize flexibility and optionality over optimizing cost of capital too early. Market forces today have only made FOAK financing even more challenging to raise.

How do you structure a credible cost and performance model without precedent?

Work closely with EPC partners to pressure-test assumptions and iterate from ±50% at FEL-1 cost estimates to ±10% accuracy by FEL-3. Use a bottoms-up approach:

Break down the project into cost drivers
Use analogs from similar infrastructure (not just your tech)
Document all assumptions, how and when they’ve been validated, and update them regularly

Early customer feedback and small-scale deployments also help refine your model and de-risk scale-up costs.

What are common risks that catch FOAK teams off-guard during construction and commissioning?

Beyond the usual suspects (cost overruns, labor issues), FOAK teams often underestimate:

Local permitting timelines and regulatory variability
On-the-ground coordination with community partners
EPCs treating every “next” project like it’s still a FOAK

To mitigate this, define roles and risk-sharing agreements early. Contract for the “what if” moments—who holds the bag when things go sideways?

How should founders organize around risk management to attract funding?

Think in phases:

Tech risk: De-risked via pilots and third-party validation
Site risk: Managed via thorough diligence and community engagement
Market risk: Addressed with offtake agreements or letters of intent

Build flexible project plans that allow for iteration and maintain “optionality.” If you're rigid, you’ll break when something shifts.

Founders who do this well create a narrative arc for investors: “Here’s what we’ve proven, here’s what we’re doing next, and here’s how we’ll get there with your capital.”

Are small projects (<$50M) fundable? Or stuck in a dead zone?

Projects under $50M often fall between the cracks—too capital-intensive for VC, too small for traditional infrastructure investors. That said, they’re not un-fundable. Tactics to succeed include:

Targeting catalytic or place-based capital (philanthropic, public, or concessionary sources)
Blending growth equity with strategic capital, venture debt and equipment lending where possible (and ensuring this doesn’t create downstream knock-on effects)
Using these projects as “stepping stones” in a larger deployment roadmap to attract project finance and infrastructure lenders who care about pipeline to deploy

The key is to frame them as high-leverage learning opportunities with clear scale potential.