Expert voices: Kathy Chen of Ulu Ventures

Climate tech investors and founders need to "diversify their sources of capital," Ulu Ventures partner Kathy Chen tells Axios.

Why she matters: Chen leads climate investing at Ulu, an early-stage firm in Palo Alto, Calif., that recently invested in Irrigreen's $15 million round for smart sprinklers and Banyan's $25 million round for project financing.

This interview was lightly edited for length.

What's been the big news in climate tech this month?

• Much of the U.S. is blanketed under high heat this month — coinciding with new research that the Gulf Stream might collapse sooner than expected. The apologue of a "frog in boiling water" is getting all too real.

What would you add to the narrative?

• Investors have poured billions into areas like carbon capture and nuclear fusion, but not nearly as much in areas such as cooling and refrigeration, which together account for 7% of global emissions.

By contrast, what's going undernoticed?

• AppHarvest [an indoor farming startup] just filed for bankruptcy last week, on the heels of AeroFarms' Chapter 11 filing just one month prior.
• It brings up the recurring theme of how to address inherent capital intensity and challenging unit economics in the transition to sustainable solutions.

One tip for climate-tech investors or founders?

• Embrace the distinction between decisions and outcomes. An investment may turn out to have a bad outcome, but it could still have been a worthwhile bet.
• The point is not to ignore or overlook risk — it's to understand, grapple with, and bound them. A good investor is able to make consistently good decisions that will in due course generate more good outcomes. Luck certainly helps.

Four fun things:

💼 First job: Working retail at a fashion brand.

👑 Proudest investment: A company at the intersection of renewables infrastructure and financing. It's exactly what we need more of: massive deployment of proven, economic solutions that meaningfully replace fossil fuels.

🤦 Facepalm investment: An investment in the manufacturing space where the founders and controlling investors clashed. Things go south so very quickly when relationships sour and good will collapses.

💡 One change you would make to climate investing: Venture is not the solution to everything. We need more philanthropic dollars at work.