When first-of-a-kind advisory firm Precursor came out of stealth last year, it was already clear that building climate tech infrastructure during the second Trump administration would require a completely different playbook. Successful companies, founder David Yeh anticipated, would need to be “lean and mean,” building modular projects with less money and prioritizing operational bankability over technical novelty.
A year in, Precursor’s pipeline has grown to more than 20 projects, and its business model has expanded with it, Yeh said. What began as a strategy and project development shop now also offers licensed investment banking services and brokers offtake agreements between climate tech startups and hyperscalers. Those were meaningful additions that clients asked for directly, that they needed to actually close financings, he added.
Precursor’s founding thesis, that the “missing middle” of climate tech is a shortage of project development expertise rather than a lack of capital, has held up. But over the course of the last 12 months, the rest of the playbook has been rewritten.
The 2021 FOAK approach, of raising hundreds of millions of dollars in a few months based on inbound term sheets, net zero goals, and “good vibes,” as Yeh put it, is effectively dead. “It’s almost comical how many startups haven’t updated their deck since 2021, 2022,” he said. “One of the things we spend a lot of time doing is getting them to be mindful and dwell in the present and understand what this new normal is.”
