Welcome to another episode of Category Visionaries — the show that explores GTM stories from tech's most innovative B2B founders. In today's episode, we're speaking with Allen Kramer, Co-Founder & COO of Crux, a sustainable finance platform that has raised over $27 Million in funding.
Here are the most interesting points from our conversation:
- Early Beginnings with Mobilize: Insights into the rapid growth and eventual sale of Mobilize, a volunteer mobilization platform, and the importance of mission-driven software.
- Decision to Sell: The multifaceted considerations involved in selling Mobilize, including the alignment with the acquiring company’s values and the impact on the team.
- Foundation of Crux: The conception of Crux amidst the passing of the Inflation Reduction Act and its aim to streamline the market for transferable tax credits.
- Market Challenges and Opportunities: The unique challenges faced in a nascent market and how Crux leverages early customer research and strategic partnerships to drive growth.
- Identifying ICPs: The process of identifying and targeting ideal customer profiles, from small renewable energy developers to Fortune 100 companies.
- Go-to-Market Strategy: Building a strong brand through market intelligence, and the importance of multi-channel marketing efforts including conferences and deep industry relationships.
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[MUSIC] >> Welcome to Category Visionaries, the show dedicated to exploring exciting visions for the future from the founders or in the front lines building it. In each episode, we'll speak with a visionary founder who's building a new category or reimagining an existing one. We'll learn about the problem they solve, how their technology works, and unpack their vision for the future. I'm your host, Brett Stapper, CEO of Frontlines Media. Now, let's dive right into today's episode. [MUSIC] >> Hey, everyone, and welcome back to Category Visionaries. Today, we're speaking with Alan Kramer, co-founder and COO of Crux, a sustainable finance platform that's raised over 27 million in funding. Alan, what's going on today? >> It's great to be here, excited for the conversation. >> I'm super excited as well. So, let's go ahead and talk about your first company, Mobilize, which I understand you've sold. It started in 2017, I believe, and then you sold. Talk to us about that company. >> Yeah, so I had the great fortune of now co-founding two companies with Alfred Johnson, my now second time co-founder. Started our last company, he said, in 2017. Really, another mission-driven company building platform for volunteer mobilization really scaled to very quickly. Obviously, it was a moment of a lot of social movements and political action. And so, started that business in that sort of time period, scaled up very quickly, had millions of people taking action on the platform, grew an incredible team, and then sold the company in 2020, shortly after the election, and had a great exit, partnered with a company called Every Action who acquired us, and really excited about that outcome, and the good that continues to happen with that platform, it's funny. I often get sort of recruited for volunteer actions or whatever, and people still send me Mobilize links, which is very fun to see it start living on and continuing to grow. >> That's amazing. Was that a hard decision to sell the company or is the offer just so good and so compelling at the timing was right, that it just made perfect sense? >> It's never an easy decision. We were weighing a lot of different factors, were they the right partner? They were. Obviously, things like economic terms were the right ones. But also, how is your team going to feel about it? How is the industry going to feel about it? And I think it's never an easy decision. But I think for us, it was certainly the right one to maximize impact and make sure that we did right by our team, investors, and broadly the ecosystem. I think one of the things that was very powerful about that was being able to prove that you could build mission-driven software and drive financial returns as well. >> And what comes to that exit? What did you learn from that process? Anything that you would have wanted to maybe optimize or change? >> No, I think we were extremely happy about the outcome. I think we had a bunch of things that we thought through as I alluded to. Really getting our investors on board, they were excited about it. Getting the team on board was a critical piece of the process, obviously, after we announced. But then most importantly, it was finding the right partner that could really carry on the mission of the business and scale it. Those were all the things that we were thinking about. We had a lot of cash on hand. It wasn't a situation where we felt compelled to sell. It was just very much the timing was right, and they were the right partner. So we had to think through a lot of different dynamics. But those were some of the key things that for anyone that's listening, that maybe thinking about this, those were some of the things that we thought about. >> And then did you join the organization? Were you working there for a couple of years? Or were you done after the exit? >> I stayed around for a little while. We didn't have to stay around for a full two years. But made sure that it was sort of in a solid place, steady home, and then left. >> And as you were there, did you start to have all these ideas in the back of your head of new ideas, new companies to build? Or did you want to just take some time off and maybe chill a little bit and relax? >> I definitely took some time. But very quickly started angel investing and advising companies to kind of keep the brain moving while also sort of decompressing. And I think that was a very refreshing opportunity to see the startup journey through a whole different lens. And also use it as a moment to reflect on a lot of the lessons learned from that company. And very helpful, distill some of those lessons and think through company building to get ready to do it again. >> Let's talk about doing it again. So at a high level, can you tell us more about what Crux does? When I did the intro, I said sustainable finance, let's expand on that. >> Yeah, so our mission is to make sustainable finance more efficient and interconnected, more starting with this new market around the transferable tax credits that were created and expanded by the inflation reduction act, helping bring together corporate buyers of these tax credits, sellers who may be renewable energy developers, advanced manufacturers, as well as intermediaries to help connect everyone. And so doing make the market more standardized and transparent. It's almost like a new asset class. And so this is the market that we've started with, our long-term mission is much broader than that. But this is such a critical new component of how renewable energy projects and decarbonization projects are financed in the US. It's about a third of the capital stack for these projects. And it's so new, needed new solutions. So I've started here and we'll sort of expand from there. >> This show is brought to you by Frontlines Media, podcast production studio that helps B2B founders launch, manage, and grow their own podcast. Now, if you're a founder, you may be thinking, I don't have time to host a podcast. I've got a company to build. Well, that's exactly what we built our service to do. You show up and host and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io/podcast. Now back to today's episode. >> What was it about this problem that made you say, "Yep, that's it. I'm going to go build here." Because I'm sure you had a long list of ideas you're probably considering and thinking through. >> Alfred and I, so after we sold Mobilize, Alfred went into the Treasury Department and where he had started his career. And after he left the inflation reduction act past, we had already started to talk about a number of ideas at this intersection of the energy transition, finance, and how we could apply software to both of those. And then the inflation reduction act passed. So there was already a sort of a backdrop thought process that we were going through. And then the inflation reduction act passed and it just became so clear that this new asset class would need new solutions. And because an efficient market was not inevitable. So once that passed and we started doing some research, it became pretty clear pretty quickly that this is where we wanted to build and really kind of leverage the marketplace experience that we had, Alfred's background in policy and also in finance. And then of course, build on a team with deep expertise from tax and renewable energy and energy finance. >> From the day you launched until the first paying customer, how much time passed? >> So one of the things that was an important context, we incorporated the company January of 2023. But guidance hadn't been released by the Treasury Department until June of last year. And so in some ways, it was this very unique moment where we were getting going. We were building the early team. We were raising capital. We were talking to a lot of potential customers. But no one in this market was transacting because it was that new. And guidance hadn't come out. And obviously the law had passed. But from the law passing to implementation details being released, they give people a confidence to begin to transact in this new market. Took some time. And so it was this very unique moment in building where we could lay a lot of foundation, do a lot of customer research up front, start to build some of the infrastructure and sort of foundations that we'd need. But then the market really opened up over the course of mid to late Q3 of last year into Q4. And from there, it's just exploded. So it was over the course of that sort of market opening up that we really started to transact and realize revenue as a company. >> And who is the ICP today? And what was the process like to uncover that ICP and yet clarity on that ICP? >> Yeah, so we have three personas that we partner with, renewable energy developers and manufacturers, people generating credits. And that could be really as small as very, very small. They're selling $100,000 of credits. The smallest transaction that's closed on a crux is $80,000. Up to very large scale, utility scale players, generating hundreds of millions of dollars of credits or billions of dollars of credits a year. And so that's sort of one part of it. We don't really subsegment down. The market really transacts differently in the very small credits from the mid-sized credits and the larger ones. But we cover the full market. Similarly on the buyer side, it really have, we have found ranges from family offices that are looking to transact in this market up to the Fortune 100. And we've transacted with everyone in between there and up to the Fortune 100. And so broadly speaking, we sell into tax departments at the corporate, sometimes sustainability teams as well, because they're the ones that are really leading the charge on evaluating if these credits might be a good way for the company to balance both financial imperatives as well as some of their impact objectives. And then lastly, we sell into, broadly what we call intermediaries, both advisors and others who are building themselves offerings for clients like tax advisors and banks who may leverage our software and network buyers and sellers to complement their own client base. And there, I think we see a lot of both, we see a lot of heterogeneity because there are a lot of different types of players that are building businesses in this space that we can equip with our solution. So I'd say the set of ICP is there is in some cases wider. - This show is brought to you by the Global Talent Co, a marketing leader's best friend in these times of budget cuts and efficient growth. We help marketing leaders find, hire, vet and manage amazing marketing talent for 50 to 70% less than their US and European counterparts. To book a free consultation, visit globaltalent.co. - And what's the marketing strategy look like to connect with those different personas? - So this is where we have been extremely fortunate to hire back our dear friends and colleague Emily Hughes, who was actually our head of marketing at Mobilize, who's now joined as our head of growth, Opus, one of our early hires at Crocs to really build from the foundation of this company, a very strong brand and really leading with insights. And that's been a core part of our strategy is, we publish leading market intelligence on this new market, things like pricing reports, objective standardized data on how people are conducting these transactions. And so especially for something like a new asset class, it's been really important to lead with insights, lead with sort of a unique take on the market and an objective perspective. And so that's been a critical component of how we've gone to market and how we've really built up our brand here. But of course, we go to a lot of conferences, we do prospecting, we have a team that has deep relationships in the industry on both the corporate side, the bank and intermediary side, as well as renewable energy developers. So it's really been a pretty multi-pronged strategy from the beginning. - So one theme that I've picked up on here is the long lasting relationships that you have. So you and Alfred have worked together now on two companies, Emily, same thing. What's the key there to having those types of relationships? 'Cause startups are stressful, they're very hard. And a lot of times the relationships kind of decay over time because of that stress. What's the key for you to sustain these long-term relationships? - It's a great question. Some amount of it is luck. We've just had the chance to work with some pretty incredible people. And I think that there is something very powerful about working through challenges very openly. Alfred and I debate all the time. And I think that we've really grown to appreciate the ways in which we're very different and the ways that we complement each other. And similarly, working with Emily again, there are a number of people on our team that joined us from Mobilize or worked previously at Mobilize. And it's just incredible to bring those people back together. But then of course, also get to work with all kinds of new people from different disciplines. So I think some of it is luck. Some of it is once you know something works, it's great to repeat it again, especially when the context makes sense. So I think those are just some of the things that I'd say, but certainly it's definitely one of the most fun parts about doing this again. - You mentioned debates there with Alfred, tell us about some of those debates and how you manage conflict. - Well, I think one of the things that work so well in my partnership with Alfred is that we are very different. There are a lot of ways in which, you know, we're similar, but we think very differently about the world in certain ways. And we push each other to kind of see the others perspective and then often end up finding that one of us convinces the other or we end up finding that the real truth is somewhere in the middle and it's always allowed us to balance going quickly with going very deliberately. And so I think that those conversations are very open and very regular. I don't know, Alfred and I talk five times a day probably. And then have sort of scheduled check-ins and are sort of very consistently sharing insights. What are we hearing in the market? What are we seeing from the team? What are we seeing in the data? And then really assessing where we need to be going. - What about your market category? Is it sustainable finance or how are you thinking about the market category? - Yeah, our business today is principally focused on these transferable tax credits as a critical component of the broader capital stack for renewable energy development and the onshoring of our supply chain around the energy transition. That sits within a broader category of sustainable finance that may include all types of other financial products, debt instruments, equity, and beyond that. - What about go-to-market decisions that have had a major impact? Are we going to just ask that a better way? What's the most important go-to-market decision that you've made so far? - I think a critical early decision was that we wanted to partner very closely with players like banks, tax advisors, major institutional players that we're going to be on the front lines of advising that naturally we're going to be on the front lines of advising their clients about entering this market. We saw that these transactions are simpler than some of the precedent transactions. The tax equity market is a very complicated type of transaction. These transactions are much simpler, but they're still going to require their people's tax advisors or their bankers to advise them on actually conducting these transactions, but also really just understanding whether or not they're a fit for them. And so one of the critical early decisions we made was to build solutions for those intermediaries that we're going to help their clients. And I think that's really proven to be a powerful ingredient here, where we can support not just buyers and sellers coming directly to the market. That's a great fit for some types of players, but for others, working with an advisor that may be on our platform is the right strategy for them. And so being really flexible has helped us drive much more liquidity earlier and also help drive standardization in a lot of places. It gives us access to more data to understand what is sort of actually standard for the market and then feed that through into the broader platform that we're building. - What about fundraising? So as I mentioned there in the intro, you've raised over 27 million to date. What have you learned about fundraising this time around? - I think maybe actually going back to your question about getting to work with the same people again, it has been great to get to work with some of the same investors and then get to meet new ones. But in our seed round, Clay at Lower Carbon had invested in our last company in Samuels from New System Ventures had invested in our last company, Shomit Dada from Overture, but previously Iron Ground Labs had invested in our last companies. There was a lot of continuing to collaborate with some of the same people, but then also getting to bring in new strategic investors from the industry as well as incredible investors like Andries and Horowitz who led our series A. And it's been great to meet new people, picking the right partners for building the business is just a critical component to that. And then very selectively leveraging our cap table to align ourselves with strategics where it makes sense. We've publicly raised capital from folks like Orsted or Ellis Power, people that are really large in this industry. And we're very excited about that because it's helped drive a lot more insight early into the business as well as of course adoption of the platform. - How does fundraising compare today to 2017 with Mobilize? - Certainly having sold one company together before was very helpful both because on so many levels, but in no small part because it certainly helps give confidence that we're the right founding team for building this business. And the fact that we've done it together before, the fact that we've been able to attract some of those early employees that worked for us before I think has been seen very positively. And I think it's been really helpful in recruiting talent as well, not just building new partnerships with investors because they see there's a solid base. We have a way of working together that has functioned before. I mean, I think it's people pretty excited. - Final question for you. Let's zoom out three to five years into the future. What's the big picture vision that like? - So certainly around the transfer with tax credit market, we see a market where corporate buyers can really easily transact these credits because they very quickly can understand the risks through our platform and in conjunction with their advisors who may be leveraging our technology, sellers can come to a liquid market where they can easily find the right counterparty for them. And then the transaction and closing experience is much more standardized and looks something like the is the market where you see a lot of standardization, a lot more standardization around sort of trading terms. And then more broadly, I think there's such demand and pull from our existing customers to be able to access additional types of capital, not just this tax credit transaction. And so it's gonna be a much more integrated one-stop shop for our partners to be able to access capital markets as they think about what they need to do to finance their projects and then find the right counterparties for them. - Amazing, well, division, all right, we are up on time. So we're gonna wrap here. Before we do, if there's any founders that are listening in, I feel inspired and they wanna follow along, where should they go? - You can find us on LinkedIn, we're very active, post a lot of great content there. So that's probably the best place. - Amazing. - Alan, thanks so much for taking the time. It's been a lot of fun. - Thank you, Brett. (upbeat music) - This episode of Category Visionaries is brought to you by Frontlines Media, Silicon Valley's leading podcast production studio. If you're a B2B founder looking for help launching and growing your own podcast, visit frontlines.io/podcast. And for the latest episode, search for Category Visionaries on your podcast platform is a bug choice. Thanks for listening and we'll catch you on the next episode. (upbeat music) (upbeat music) (upbeat music) [MUSIC PLAYING]
