Article contributed to illuminem as part of my Reclaiming Entrepreneurship series.
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Audacious. Crazy. Inspired. Hippy nonsense.
Whatever version of ‘impossible’ you may want to tack onto the notion of disrupting a global climate and impact startup financing system, that is nonetheless the job at hand. When you come to understand that venture capital is fundamentally incompatible with impact — social and environmental — then the only logical conclusion is that the system has to change.
Scratch that. The system won’t change. We need to change it. It needs, to use a term particularly favoured by venture capitalists, to be disrupted.
Disruption, or system change, does not come about easily. It is hard because, by definition, going up against an incumbent makes you the underdog. Not in the romanticised sense presented by David vs. Goliath story arcs. But in a very real sense, the system has reserves of financial, political, and cultural capital which are impossible to match. This is a big reason why so many people prefer the route of “changing the system from within.” It’s easier to swim with the current. Being within the system gives you — completely theoretically — access to those different forms of capital. But the reality is that to gain that access you need to play by the system’s rules, which in the long run only serves to reinforce the system rather than to create change. The current inevitably takes you with it.
After taking you through the narrative and evidence for why and how the consequences of climate capitalism are always exploitative, it’s now time to explore strategies for disruption.
To do this, I draw on the work of Donella Meadows and Clay Christensen.
Meadows, famous for her seminal work on The Limits to Growth, provides us with the notion of leverage points and how to use them to put pressure on an incumbent system. Christensen, renowned for his work on The Innovator’s Dilemma, may seem at first like an unlikely ally, as his work is primarily focused on propping up the venture capital industrial complex. But his insights on how disruption happens — and how it can be engineered — will provide the perfect counterpoint and complete the toolkit.
In this first part, we will look at leverage points within the climate capitalism venture funding ecosystem.
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