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XElevation Ventures Is Raising $50M for a Climate-Focused Tech Fund in SoCal
Deirdre Newman
Deirdre Newman is an Orange County-based journalist, editor and author and the founder of Inter-TECH-ion, an independent media site that reports on tech at the intersection of diversity and social justice.
Interest in electric cars is spiking as gas prices rise to their highest prices in years, but supply chain headaches and the lack of infrastructure such as charging stations are keeping the demand pent up. And, the longer-term effects on power grids will mean there will be lots to upgrade, even after the transition to cleaner technology, like electric vehicles, comes online.
Elevation Ventures, a new climate-focused venture firm in Orange County, is raising a $50 million fund to focus on technology that can provide new products and services. The fund will target seed-stage companies in SoCal, though it might also invest in a few Series A funding rounds. Check sizes will range from $500,000 to $3 million.
Elevation has partnered with two local organizations with deep roots in O.C.: business incubator Octane and Sustain SoCal, a network of professionals focused on clean tech development.
A VC Built By Consortium
Elevation Ventures Managing Partner Neal Rickner is an Orange County native who recently moved back to the area from Silicon Valley, where he was the COO of Makani Technologies, a company that developed airborne wind turbines. It was acquired by Google in 2013, and then eventually shut down by Alphabet, Google's parent company.
Elevation Ventures Managing Partner Neal Rickner.
Image courtesy of Neal Rickner
He also worked with what’s known as “X,” (formerly Google X), a research and development facility founded by Google, which now operates as a subsidiary of Alphabet.
”I’ve been through the ringer...up there,” he said. “I learned the best I could from the best innovators in the world."
But it wasn’t until Rickner did some serious reflection in 2020, that he decided to move back to Orange County. He had some informal conversations with members from Aliso Viejo-based Octane’s team in 2017, but it didn’t coalesce until 2020. Octane acted as the catalyst and facilitator, bringing in Sustain Socal. Elevation Ventures was formed.
Octane already has a track record in investing. In 2016, it partnered with Visionary Ventures, a VC firm that backs ophthalmology and aesthetic startups, which have a strong presence in Orange County.
The organization has both for-profit and nonprofit branches and serves SoCal’s general technology and medical technology ecosystems—connecting people, resources and capital. One of its initiatives is a four-month accelerator program called LaunchPad that gives local founders access to a slew of advisors and resources.
Sustain SoCal is a hub of climate, sustainability and environmental experts, with a presence at UC Irvine’s innovation center, The Cove. The network comprises thousands of experts; most have been involved with clean tech and/or climate tech for 20 years or more.
Elevation expects to make 15 to 20 investments from this first fund, over the next two to three years, Rickner said. Even before the first close of the first fund, expected this summer, Elevation is already writing checks through a type of investing known as a special purpose vehicle. Typically set up as an LLC or limited partnership company, SPVs make a single investment into just one company.
Rickner, Octane CEO Bill Carpou and Sustain SoCal CEO Scott Kitcher put together a mission statement for their new venture firm in the fall.
”The three of us bring together the core ingredients for a VC fund to succeed,” he said. “And, we complement each other well. We have different networks and skill sets, but we’re mission-aligned and collectively-aligned.”
The team hopes to raise around $20 million by the summer. It’s raised just over $10 million so far, Rickner said.
“The first commitments are all from SoCal and know Octane or SoCal well,” Rickner said, adding that they’re targeting high net-worth individuals and family offices.
Elevation recently also brought on longtime climate technology investor Rachel Payne and former Seeder Clean Energy co-founder Alex Shoer.
Early Investments
Elevation’s first investment, for which it raised more than $1 million, was in Los Angeles-based Veloce Energy. The startup runs a software platform and installation system to enhance the move to a decentralized, distributed energy grid that enables anyone to trade electricity on its networks.
Rickner said companies like Veloce can accelerate the shift to these decentralized power systems “faster and cheaper” than enormous electricity providers.
In late April, the firm made its second investment (also through an SPV) in Carbon Collective.
The Alameda-based startup enables employees to use their retirement funds to fight climate change by divesting from companies that contribute to climate change and to re-invest in companies working to combat the climate crisis.
“Venture deals move quickly,” Rickner said, in explaining why he opted to raise money quickly via SPV rather than waiting for the fund to close. “These first two deals were great opportunities. We had special access, and we didn't want to pass them up.”
Rickner declined to disclose the amount of either investment.
Photo by Tyler Casey on Unsplash
Next Industrial Revolution
It wasn’t an easy decision to leave Silicon Valley.
“Part of the allure for me was [the opportunity to] work on something I’ve been passionate about for a long time,” Rickner said.
He credits the pandemic and lockdowns that followed with inspiring him, like many others, to reflect on what was important.
“A lot of people woke up and decided we had to take better care of our environment, that climate change was happening,” he added. ”When you take time, you realize there are more floods and fires and extreme events, and it became personal to a lot of folks."
Elevation will have plenty of opportunities to invest close to home, Rickner noted. Orange County is home to some of the biggest names in electric vehicles, including electric pickup truck maker Rivian Automotive, which is headquartered in Irvine.
But it will also have local competition. Laguna Beach-based Keiki Capital launched in 2017 to invest in climate tech startups at the pre-seed and seed level.
Rickner sees the time we’re living in as a transition into the next industrial revolution—and he sees opportunities.
“90% of the world economy, as measured by country GDP, has committed to net zero,” he said, referring to several nations’ pledges to move to power sources that are carbon neutral.
More than half of the world’s corporate and financial institutions, as measured by revenue and assets under management, have committed to a net-zero approach, he added.
“The previous industrial revolutions produced many billionaires,” Rickner said. “And this one will do the same.”
Deirdre Newman
Deirdre Newman is an Orange County-based journalist, editor and author and the founder of Inter-TECH-ion, an independent media site that reports on tech at the intersection of diversity and social justice.
From The Vault: VC Legend Bill Gurley On Startups, Venture Capital and Scaling
09:55 AM | March 24, 2023
Bill Gurley
This interview was originally published on December of 2020, and was recorded at the inaugural dot.LA Summit held October 27th & 28th.
One of my longtime favorite episodes of Office Hours was a few years ago when famed venture capitalist Bill Gurley and I talked about marketplace-based companies, how work-from-home will continue to accelerate business opportunities and his thoughts on big tech and antitrust.
Benchmark General Partner Gurley is based out of Silicon Valley and known famously for investing early in trailblazing companies including Uber, GrubHub, Zillow and so many others.
Gurley has looked over thousands of pitches from companies over the years and he shared the two things he looks for in each startup: unfair competitive advantages and the go-to market.
“I think Facebook’s approach of going slow through Harvard in the Ivy League, then college, built something much more durable than MySpace did, who just kind of launched everywhere,” he said.
dot.LA Reporter Decerry Donato contributed to this post.
Want to hear more episodes? Subscribe to Office Hours on Stitcher, Apple Podcasts, Spotify, iHeart Radio or wherever you get your podcasts.From Your Site Articles
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Spencer Rascoff
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
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Column: How to Make Sure We Address Bias in the Workplace, Even as the Workplace Dramatically Shifts
11:27 AM | December 28, 2020
We will soon be turning the page on the pandemic of 2020 that has dominated headlines and consumed the conversation in boardrooms across America. Along with the rapid adaptation of digital workforces, we have also seen another growing revolution that is gaining momentum in its quest for change. The year brought with it a duality that kept our attention on the pandemic while at the same time we watched in disbelief as so many occurrences of racial injustice dominated the headlines. COVID-19 may eventually fade from public view, but we cannot allow the issue of pervasive racism to slip below the surface, too. As we move into the next year it is important for us to continue building awareness on the fundamental conversations needed for the country to heal around racial boundaries. Corporate leaders have a vital role to play in that process as we adapt to the technology-driven distributed workforce of tomorrow.
Now is the time to elevate discussions about racism in the workplace. Public opinion is shifting rapidly on the topic, and there is an expectation for brands and leaders to make public statements on where they stand. Professional sports, the fashion industry, big tech and even food delivery apps have generated viral stories because of their action or hesitance to take a position on racism during the pandemic. C-suite professionals can no longer take a neutral approach on the topic of racism because the conversation is now growing louder within their own workplaces. The good news is that many leaders and brands are beginning to make commitments to better understand the complexity of the issues we face.
Creating the workforce of tomorrow also means building an equitable environment for all people. That dynamic is creating a growing consensus that the days of racism, sexism, ageism and all forms of discrimination must end. The new distributed structure of the digital work environment has created opportunities for change, but at the same time challenges to progress that must be addressed. This dynamic is especially relevant for tech firms like VMware, Facebook and Google. Companies have generally faced geographic staffing limitations that excluded potential new hires from diverse cultural backgrounds because of the relocation requirements. Tech firms must consider diversity in hiring more than ever as more barriers are removed by the evolving remote workforce opportunities.
Many companies hoped to implement diversity training and strategies to create more inclusive workplaces in the months ahead. When those plans were created, they assumed employees would be predominantly based in the same physical locations. Newly formed distributed employee environments have created barriers to communication and more subtle, but equally harmful, forms of racism and discrimination have increased.
Instances of racism on digital platforms are on the rise and are not always limited to social media. Even Airbnb and Uber have found it necessary to implement strict measures to weed out pervasive forms of racism on their platforms. A 2015 study by Harvard Professor Michael Luca and colleagues Benjamin Edelman and Dan Svirsky — now economists Microsoft and Uber, respectively — used booking requests by 20 mock Airbnb profiles without photos to gauge discrimination among 6,400 Airbnb hosts in five American cities. Requests made from profiles with African American-sounding names were about 16% less likely to be accepted. Members of the new application Clubhouse have even posted chats rooms where Black women have been criticized and harmed, just for being Black women. Additionally, messaging platforms like Telegram have been widely criticized as hundreds of white supremacist groups have sprung up on their apps. Most digital workforces are now communicating through a myriad of messaging, email and social applications where bias, microaggressions, and even overt racism take place, while the perpetrators launch culture-destroying ideology from behind a keyboard. Marginalized communities have previously found their "safe place" at home and in their digital lives. As the new digital work culture blurs those lines it is having a detrimental impact.
Corporate leaders must consider this challenge as an opportunity to create an all-encompassing approach to their diversity, equity and inclusion policies. Many forward-looking companies have been quick to act on pandemic-era adjustments, but as the remote workforce becomes permanent it is important to evaluate the new environment.
- Start by establishing an internal committee dedicated to your diversity, equity and inclusion efforts to understand the unique impact of your new distributed workforce. This group should be rewarded for their efforts and not seen as an additional task force.
- Consider all current communication platforms and evaluate necessary technology and policy changes. Create membership agreements that emphasize inclusive and non-discriminatory practices and fire people who violate those terms with consequence.
- Create safe spaces for open dialogue, where marginalized populations can feel safe to speak up about their experience without being tone policed. Real change will only happen when all people truly know that their voice is heard and used when decision making is happening within your company at the highest level.
- Recruit more BIPOC (Black and Indigenous People of Color) in executive and leadership positions. Develop competencies that respect their expertise and allow them to contribute.
- Stop expecting one practice to solve your problems. Companies like Netflix, Comcast, Parametrix and Zillow have long-term plans that dedicate resources to diversity, equity and inclusion for up to 5 years. They are realistic, diligent and patient when creating goals and metrics. You need a plan and well-intentioned and competent people to develop and execute it!
Finally, we need to recognize that progress is being made. America is on a journey to building more equitable workplaces. Catalyst events have occurred that created more urgency to make change. Some brands and leaders have been quick to implement new strategies while others are still considering their best path forward. We did not get here overnight, and we will not have instant transformation, but doing nothing is no longer an option. Considering the workforce of tomorrow as an ever-evolving environment with opportunities for consistent improvement is important. Yes, the road forward for many companies will be challenging as they implement changes. However, the road behind us is filled with bias, discrimination, and injustice for marginalized groups. Leaders that see this reality and understand that their workplace will only truly thrive when it is equitable will see results as the most successful workplaces of tomorrow.
Dr. Cheryl Ingram, PhD is a diversity, equity and inclusion strategist and founder and CEO of Inclusology and Diverse City LLC.
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Cheryl Ingram, PhD
Cheryl Ingram, EdD. is the CEO and founder of Inclusology, a software company that is using machine learning to build the world's greatest diversity, equity, and inclusion (DEI) assessments, benchmarks, and automated solutions). Diverse City LLC is a diversity, equity, and inclusion consulting firm working with organizations across the United States. Cheryl has been training and coaching in the area of diversity and inclusion for 18 years. She has her Doctorate of Education with a specialization in D&I, a Master of Arts in Education, and her Bachelor of Arts in Communication Studies, all from New Mexico State University. Cheryl's company works with clients such as Netflix, Uber, Foursquare, University of Washington and others to help them build sustainable and fair DEI Practices. Cheryl's many passions related to social justice and equity include serving on the board of directors for Unloop, a national technical training program that addresses recidivism in prisons throughout Washington State.
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