About episode
Every once in a while I come across an investment firm with a really different edge and perspective. Overture VC is one such firm. Their specialty is policy – not just understanding the unique opportunities climate tech companies have with government incentives and helping them navigate that tricky terrain, but also actually lobbying for policies that’ll benefit their portfolio companies.
In the words of Overture Founder and Managing Partner Shomik Dutta, there’s a $1.2 trillion dollar wall of government money coming downhill for climate companies. So Overture’s edge is meaningful and can make a big difference for a wide range of companies. Shomik and I discussed his background, how he moved into investing from politics, the opportunities recent climate policy has created for startups, examples of Overture’s portfolio companies, and how the firm has helped them, and much more, including what’s at stake in the upcoming election.
Speaking of the election – it’s next week. If you don’t yet have a plan for how to get your ballot in or haven’t called your friends and family to make sure they’re voting, now’s the time. Shomik mentions a mobile app called Reach – a great tool to help you contact people you know in swing states.
In today’s episode, we cover:
- [03:01] Shomik Dota’s Background and Transition to Investing
- [06:05] Overture VC’s Unique Approach and Government Incentives
- [09:12] The Role of Government in Climate Tech and Overture’s Strategy
- [12:44] Overture’s Portfolio and Specific Investments
- [16:56] Examples of Overture’s Work and Impact
- [20:45] Overture’s Fund and Investment Focus
- [23:05] Election Impact on Climate Policy
- [25:41] Future Policy Needs and Final Thoughts
Shomik Dota’s Background and Transition to Investing
Shomik explains that his first love was politics, as he genuinely believed it was an effective way to help the most people. He started his career working for Barack Obama at a young age, joining his early campaign staff and helping to launch Obama’s unlikely presidential run. Shomik had the opportunity to work in the West Wing for a couple of years after the campaign as Chief of Staff, which he describes as a “ride of a lifetime.”
After that, Shomik went to business school and shifted his career into climate, working on utility-scale solar projects around the world. In 2016 after Trump’s election, Shomik launched a venture fund to help modernize the tech stack of the Democratic Party. This experience led him to found Overture VC, which allowed him to unite the various threads of his background – from campaigns and politics to government, climate, and early-stage investing. Shomik’s three co-founders at Overture are also close friends he met through his political work.
Overture VC’s Unique Approach and Government Incentives
Shomik explains that the climate problem is a market failure that needs to be addressed, and the government will play a central role in this, similar to how it supported industries during World War II. He points to the $1.2 trillion in government money coming through the Inflation Reduction Act and infrastructure bill as a major opportunity for climate tech companies.
Shomik notes that successful climate 1.0 companies like Tesla and SunRun were able to access government programs to survive and scale. He argues that even with solved techno-economics, companies will need government help to ramp up manufacturing at the necessary scale, as the market alone will not be sufficient.
Overture’s model is to invest in early-stage startups and provide them with government affairs support through their partner firm, Boundary Stone. This allows Overture to help their portfolio companies access tax credits, non-dilutive capital, low-cost loans, and shape policies to support their long-term success. Shomik emphasizes that while techno-economics must ultimately be solved, government partnership is crucial to enable rapid scaling in the near-term.
Overture’s Fund and Investment Focus
Overture VC manages a $62 million fund, focused on investing at the seed and Series A stages. Shomik mentions they are preparing to launch Fund 2 in the next 6 months, with some exciting new additions to the investing team.
Overture’s investment strategy is to look for great founders building defensible technology in massive markets, with an “obsessive drive to go build in a hurry.” Shomik emphasizes the importance of having a government affairs strategy for these early-stage startups.
He notes that Overture’s unique approach sets them apart, as they work to help their portfolio companies access government programs and incentives, such as the 45Q tax credit. Shomik shares that 100% of Overture’s startups who applied for the 48C tax credit were successful, with a median of $6 million in non-dilutive funding.
Beyond just accessing programs, Shomik explains that Overture also works to shape legislation and policies in ways that can benefit entire corners of the climate tech industry. This includes things like inserting language into bills or supporting local political actions that create new markets for their portfolio companies.
Election Impact on Climate Policy
Shomik emphasizes that this upcoming election is critically important, stating that every four years we say it’s the “most important election of our lifetime,” and he believes this is truly the case.
Shomik strongly encourages listeners to get involved in political action, particularly through “relational organizing” – using an app called Reach to contact friends and family who are registered voters in key swing states like Pennsylvania, Wisconsin, Michigan, Arizona, North Carolina, and Nevada, and urging them to vote.
Shomik warns that if Republicans gain control of the White House, House, and Senate, they could attempt to repeal the Inflation Reduction Act, which he says would set back decarbonization efforts by at least a decade. He stresses the responsibility of those who have benefited from the IRA to go protect it through political engagement and turnout.
Beyond just defending the IRA, Shomik says the next four years need to focus on helping the rest of the world implement similar climate policies, as well as providing more support for the hardest-to-abate sectors to scale faster. He believes increased collaboration between government and industry, similar to World War II, will be required to drive the necessary climate progress.
Resources Mentioned
Connect with Shomik Dutta
- Connect with Shomik on LinkedIn
Connect with Jason Rissman
Keep up with Invested In Climate
- Sign up for our Newsletter
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