Zinc, which launched in 2017 with LSE as a founding partner, is a mission-driven venture capital firm that exists to support exceptional talent to build new ventures that impact millions of people worldwide in a number of areas including: the environment, later life, mental health, and globalisation and automation. We spoke to founder and alumna Caroline Haynes about her experience of founding a climate-tech company through the Zinc Venture Builder.
What inspired you to co-found Granyt and how did it happen?
Around a year ago I moved out of London to Suffolk. The economy here is made up of two things – industry and agriculture. There are lots of manufacturing and logistics companies because of our proximity to Felixstowe port. Driving around I noticed that almost none of the many industrial units had solar panels. When I spoke to businesses, I was shocked that over 70% wanted to install solar and batteries but couldn’t get loans to pay for them, despite the significant grid energy savings to operating costs due to uncapped commercial energy prices.
Here was a problem that, if solved, could help lots of businesses take steps to decarbonise in the short-term and Granyt is our attempt to solve that problem. We are a climate fintech platform and have developed innovative credit and risk scoring models and online interfaces so we can originate, allocate and securitise green loans for investment at scale. In layman’s terms our platform links green investment funds to SME green loans.
How did you meet your co-founder?
Most people meet their co-founder(s) through the Zinc platform. As I was developing a business that would be regulated, Zinc allowed me to bring in an external co-founder with infrastructure finance experience, Bernard Yu.
Bernard and I had worked together years ago on a large telecomms finance deal. I knew he was deeply committed to climate change and was involved in a sustainable food start-up that recently launched at Waitrose. I was extremely lucky that the timing was right and he was as passionate as me about solving the problem I had become fixated on. Plus he’s great to work with, even though he’s a chartered accountant!
What’s your background?
I grew up between the US and the UK, and have worked on both sides of the pond. I trained as a macro economist and cut my teeth at the Federal Reserve Bank of New York. Then I moved over to London and worked in macro roles at Visa International and PwC.
After that I spent about ten years advising government on financial regulation and fiscal policy working in the No 10 Strategy Unit, different government departments, and as an economic advisor to the Chancellor.
I then moved into project finance where I helped to structure private debt deals to fund regeneration projects in economically-challenged cities across Europe and the Middle East, and gaining a detailed understanding of the mechanics of debt financing.
What made you decide to go into entrepreneurship?
In truth, I fought being an entrepreneur for many, many years. My father had been an entrepreneur during the early computing years of the 1980s and 90s, and it was pretty brutal. So from a young age I swore I would never follow in his footsteps.
For many years I tried to tackle ‘mission’ problems from within companies, government and political parties. But there are structural guardrails limiting what you can achieve – shareholder returns, legacy processes and systems and, in political parties, voter support for policies. When I realised that the risk of staying in large institutions and trying to help businesses tackle climate change and failing had become greater than the risk of going out on my own to start a business and failing, I started to plan how I would start a new phase as a founder.
Entrepreneurship provides you with total freedom to go off and test ideas and quickly build prototypes to test with users and investors. And, excitingly, the new generation of no code software packages combined with new fintech compliance platforms makes it viable to stand up new solutions within a few months.
How did you find out about the Zinc Venture Builder?
I’d known of Zinc for several years. I was a voluntary Fellow on their second cohort which focused on the creation of businesses that help cities left behind by globalisation and automation.
I worked with some of the Founders and their early-stage businesses as they developed and tested their ideas. I experienced firsthand the buzz of Zinc, the enthusiasm of the exceptional founders and the staggering progress they make as companies in a really short amount of time. When I saw that the mission for my cohort was focused on tackling the environmental crisis, I applied.
What was your experience of the Zinc Venture Builder?
The Venture Builder is like an MBA for start-ups on steroids. The first month of the programme is highly structured learning with a tailored curriculum to the mission area. In our cohort we had guest speakers from companies like Ikea and Ben & Jerry’s talking about their sustainability pain points, successful start ups and multiple panels with early-stage venture capital firms and investors. There was also a lot of material on behavioural science research techniques and testing approaches.
A huge amount of what I learned was through the people in my cohort. The calibre and range of people was pretty mind blowing. We had people with deep expertise in energy, architecture, machine learning, satellite data analysis, software design and previous founders who have achieved successful exits. I can’t think of any other place where such a diverse group of individuals would all come together, in one cohort, committed to solve one mission.
Zinc wraps a comprehensive infrastructure around you as a newbie founder through staff with different specialisms, over 100 Fellows and personal coaches to support you through the process of finding a co-founder and testing venture ideas.
It was a profoundly inspiring, invigorating and sometimes exhausting period of time. How often as an adult do you get to explore ideas, question experts and learn so much? I think it would have been very difficult to found Granyt, progress the company so quickly and raise capital without Zinc or the Venture Builder programme.
How do you think your time at the LSE prepared you for your entrepreneurial journey?
My LSE master’s provided me with a lot of different frameworks and approaches to break down and answer complex questions, something that is fundamental to being a founder. It also helped me throughout my career – I went straight into the No 10 strategy unit after completing my master’s and began applying what I’d learnt immediately.
I kept in touch with a couple of my professors who have acted as sounding boards and given me solid advice over the years. And the wider LSE network is incredibly supportive – from the alumni network to the new venture arm, Houghton Street Ventures.
What advice would you give anyone interested in becoming an entrepreneur in the climate tech space?
My advice would be that the time is now. We are just at the beginning of the climate tech wave. Many of the climate solutions will come not from deep tech, but from small, consistent behaviour changes and better aligned incentives. These require innovative new business models and greater circulatory - all rich space for new ventures.
From an investment perspective, there is a lot of capital moving into funding climate tech with a number of specialist venture capital funds. I would also advise joining a Venture Builder as the success rate is higher than going it alone – and the journey a lot less lonely.
What about people who are considering joining the Venture Builder?
The Zinc Venture Builder is a great option because you are deeply immersed for at least six months and the level of support you get is incomparable with other platforms. If people want to go through the experience of building a business, and learning not only about the space you’re building in but also about yourself, then I would recommend Zinc.
How can people get involved and support Granyt?
There are a couple of different ways. We are about to open up our lending platform to angels and certified investors for investment into portfolios of risk-assessed, climate transition loans for SMEs. And we are always interested in speaking to energy-intensive businesses that need capital to decarbonise and new climate hardware companies.
The next cohort for the 12-month, full-time, Zinc Venture Builder starts in October 2023. The mission is to eliminate environmental threats to our health. Zinc are looking for exceptionally talented individuals who are ready to start their entrepreneurial journey and build a venture from scratch that tackles a problem in this area. The Zinc platform offers up to £250,000 in investment, tailored support, mentorship plus expert advisory and investor networks. Applications are open now. Granyt is on a mission to make climate transition hardware financing simple and affordable for UK small and medium businesses. Find out how to get involved.