Financing through Stranded Assets

A few months back, I penned an article titled “Business Models: from Linear to Circular to Regenerative,” which resonated with numerous readers.

I firmly believe that we need entrepreneurs who can tackle multiple challenges simultaneously with their ventures. Regenerative businesses are essential across various sectors, particularly those that utilize, design, and work with abundant materials to create fully compostable products.

We require startups that can transform production processes to minimize energy consumption and cleverly leverage stranded assets to finance their regenerative initiatives. In essence, we need ambitious, innovative, and dedicated entrepreneurs.

A Diverse Array of Solutions

Startups in this space have the potential to revolutionize our food systems, ensuring they yield more calories than they consume. Organic farming ventures can restore soil health, collaborate with nature, and engage in direct sales to consumers.

These businesses can thrive by intensifying ecological practices and creating additional revenue streams from waste. Collaborative cooperatives can also enhance local economies, as seen in El Hierro, the smallest Canary Island in Spain.

The cooperatives in El Hierro ensure fair wages for all. There isn't a singular path to this transition; instead, we need a diverse range of solutions and a culture of understanding rather than harsh judgment.

We are all navigating new ways to coexist within our planet's limits, unfortunately constrained by an economic system that prioritizes monetary value over other essential measures.

This reality complicates the journey for purpose-driven entrepreneurs. Their path is filled with trial and error, resilience, and adaptation.

A Major Transition

If you've made it this far, you likely understand my perspective on the urgent need for change. In the following sections, I’ll share examples of startups that embody this transition.

I hope these examples inspire you to participate in this significant shift toward an equitable economy driven by passionate individuals unafraid to work in harmony with nature for a brighter future.

The Diaper Cycle

One startup that truly captivates me is Dycle in Berlin. Founded by conceptual artist Ayumi Matsuzaka, it features a groundbreaking business model for diaper management.

The Dycle team has created a completely compostable diaper that communities can produce locally. Parents can drop off used diapers at a central point to be transformed into terra preta, a nutrient-rich black soil.

This soil can regenerate land and be used to cultivate fruit trees, ultimately nourishing the very children who once used those diapers. This exemplifies a true circular economy—a diaper cycle.

The benefits are substantial: eliminating diaper waste (each baby generates around 500 kg of diaper waste within their first 2.5 years), regenerating barren land with terra preta, providing healthy fruits for children, and fostering community connections among parents and supporters.

Several European cities are interested in replicating this model, but Dycle must first focus its limited resources in Berlin.

The challenge lies in managing multiple revenue streams, which will stabilize once the income from terra preta is realized. However, the timeline between diaper collection and soil composting can be lengthy. Impact investors who understand these nuances are few, but I remain hopeful for positive change.

I would also be eager to connect with impact investors who grasp these challenges and wish to support innovative business models without falling into debt traps.

Harnessing Abundant Materials

Another category of startups I admire is those focused on abundant materials like industrial hemp, thistles, bamboo, nettles, and seaweed.

For a sustainable future, we must shift our material sources. We need to produce resources that grow naturally, without chemicals or fertilizers, in a biodiverse manner. This approach is essential for regenerating our planet and fulfilling our basic needs.

One such startup is Dutch Harvest, founded by Esther Molenwijk, which aims to restore the prominence of industrial hemp.

Dutch Harvest produces hemp tea and operates in seven European countries. Hemp's versatility spans construction, automotive, textiles, food, and more. Rest assured, the industrial variety won't get you high.

“Seaweed is one of the few truly scalable solutions for addressing the CO2 problem.” — Professor Tim Flannery, author of The Weathermakers

Biodiversity in the Sea

Seaweed is another material deserving attention. I closely follow two companies in this sector: Seatech Energy and The Seaweed Company.

Seatech Energy creates marine platforms promoting biodiversity in seaweed growth, effectively regenerating marine ecosystems. Their efficient biodigester converts harvested seaweed into energy.

This solution could prove invaluable for island nations like Indonesia, enabling energy production from local marine resources.

The Seaweed Company innovates with seaweed on multiple fronts, having established a commercial seaweed site in Ireland and developing various scalable products.

Quick Prototyping

Another inspiring startup is Straw by Straw, founded by Everlyn, who exemplifies quick prototyping. Initially not focused on sustainability, she became passionate about addressing plastic pollution after witnessing its effects while diving.

She created an edible straw, but feedback from bartenders revealed that consumers weren't interested in eating their straws. Recognizing the need for a practical solution, she pivoted to producing biodegradable straws from agricultural waste, providing organic farmers with an additional income stream.

Her journey is just beginning, with her ambition to combat plastic waste driving her forward.

A tip for startups: engage your target audience early in product development. If you’ve spent years perfecting a product in isolation, you may become resistant to constructive criticism, which is crucial for success.

Be a Rockstar

Before I conclude, I want to highlight one last startup: Paper on the Rocks. This company is redefining the paper industry. Next time you jot down notes, consider using rock paper.

This innovative paper is crafted from waste stone from mining and PET plastic, requiring no water or chemicals for production and being recyclable indefinitely.

Their commitment to innovation also led them to switch to fully biodegradable plastics from Novamont, further enhancing the sustainability of their products.

If you’re interested in sharing your entrepreneurial journey, feel free to connect with me on LinkedIn. I’d love to hear your story!

Further Reading

For those interested in exploring more about sustainable economies, here are some resources:

• Books and Study on a Healthy Economy for People and Planet

  Top 7 books and schools for a shining future.

• How to Scale a Regenerative Business Model

  To scale or not to scale. Whatever you choose, ask the right questions.

• Are Electric Cars Sustainable? Please, Think in Systems!

  Systemic thinking gives direction for new regenerative business models.