Hello everyone! Thanks for joining me on another week of Fishing in Venture. I’ve recently transitioned back into the Corporate Venture space and am excited to bring you along my journey within the early-stage tech scene. If you’d like to hear more about my new role, feel free to reach out to me! Now, let’s dive into what I’ve been learning 

Fishing in Venture

Plastic Pyrolysis – A Path to Circularity

As the world grapples with a growing plastic waste crisis, plastic pyrolysis offers a promising solution that goes beyond traditional recycling. While conventional methods often recycle only specific types of plastic, pyrolysis breaks down mixed and contaminated plastics into their molecular components, transforming them into valuable resources like oil or gas. This process could be a key player in addressing the vast amounts of waste that current recycling systems cannot handle.

Pyrolysis, classified as an advanced recycling technology, operates by heating plastics in an oxygen-free environment, breaking down long polymer chains into smaller, reusable hydrocarbons. Unlike mechanical recycling, which degrades plastic quality over time, pyrolysis maintains the integrity of the material, making it suitable for chemical recycling, where the output can be repurposed into new plastics. This creates a circular economy, where plastic waste is continuously reused rather than discarded into landfills or oceans.

According to a Yale Environment report, while advanced recycling technologies like pyrolysis hold potential, they also face significant challenges. The environmental impact of these processes, particularly concerns over greenhouse gas emissions, is still a topic of debate​. Critics argue that some pyrolysis systems, especially those that burn a portion of the plastic for energy, may release harmful pollutants, potentially undermining their environmental benefits.

However, companies like Resynergi are working to minimize these issues. Their Continuous Microwave Assisted Pyrolysis (CMAP) technology uses microwave energy to break down plastics 100 times faster than traditional pyrolysis methods while maintaining a cleaner, more efficient process. By focusing on creating high-quality oil products that meet refinery standards for chemical recycling, Resynergi aims to significantly reduce our reliance on virgin fossil fuels​

The Potential Impact of Plastic Pyrolysis:

1. Closing the Loop on Plastic Waste: One of the most promising aspects of plastic pyrolysis is its ability to process plastic waste that typically ends up in landfills, such as contaminated plastics, packaging, and multi-layer films. This waste would otherwise sit for centuries, leaching chemicals into the environment.
2. Reducing Dependence on Fossil Fuels: Pyrolysis-generated oil can serve as a direct replacement for petroleum in manufacturing new plastics, reducing the need for virgin fossil resources. This shift could drive a significant reduction in the carbon footprint of plastic production.
3. Economic Viability: Pyrolysis can be particularly valuable in regions where the economics of traditional recycling don’t add up. The scalability of modular technologies, such as Resynergi’s CMAP, makes it viable for smaller communities that generate 20-50 tons of plastic waste daily. This flexibility positions pyrolysis as a “game-changer” in expanding recycling’s reach to underserved areas​

Nevertheless, as Judith Mernit writes in a Yale Environment blog, the long-term viability of advanced recycling hinges on resolving regulatory and environmental concerns, particularly around emissions and energy use​. Scaling these solutions while maintaining strict environmental controls will be key to realizing pyrolysis’s potential in combating the plastic waste crisis.

Sources: Inside Climate News, Yale Environment Blog, and Pulse 2.0

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Fish of the Week

Leading the Way in Plastic Pyrolysis

This week, we spotlight Resynergi, a startup at the forefront of plastic pyrolysis technology. Based in California, Resynergi recently raised $6.4M in Series B funding to scale its innovative Continuous Microwave Assisted Pyrolysis (CMAP) system. Unlike traditional pyrolysis, which can take days, their modular technology breaks down plastic waste 100 times faster, transforming it into reusable materials like pyrolysis oil that can be used to create new plastics or fuel.

Resynergi’s system is not only efficient but also designed to be scalable and compact, making it easier to deploy in smaller communities. Each modular unit can convert 1.25 tons of plastic per day, and by stacking units, the company plans to scale production to 5 tons per day across the U.S.

The vision behind Resynergi is ambitious: to divert millions of tons of plastic from oceans and landfills, contributing to a more circular economy. Their focus on high-density polyethylene (HDPE), low-density polyethylene (LDPE), and polystyrene (PS) ensures that some of the most common and hardest-to-recycle plastics can be reused​

Pulse 2.0

For more detailed information, visit their Crunchbase profile.

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Ebbs & Flows

Revenue-Based Financing – A New Model for Startup Growth

While venture capital, debt and equity-based funding have traditionally dominated the startup world, Revenue-Based Financing (RBF) is emerging as a compelling alternative. For startups wary of giving up equity or control, RBF offers a way to raise capital by pledging a percentage of future revenue instead of shares.

In an RBF model, investors provide upfront capital, and instead of fixed repayments, the startup repays a percentage of its revenue until the loan (plus interest) is repaid. This structure is particularly appealing for startups with steady revenue but who want to avoid the pressure of hitting massive growth milestones required by equity investors.

From the investors lens, it’s also a safer and quicker way to get liquidity from their investment. As the startups are returning dividends and interest on the debt, the investors get steady cash flows that fuel their desired returns.

Why is RBF gaining traction?

1. Flexibility: Since repayments are tied to revenue, if your company has a slow month, you aren’t stuck with a hefty fixed repayment.
2. Founder-Friendly: You don’t dilute your equity or bring new board members, maintaining control over your company’s future.
3. Short-Term Commitment: Unlike traditional loans or equity investments, RBF often has a shorter repayment horizon, making it a lower-risk capital option.

Key Revenue-Based Financing Funds:

• Lighter Capital: Focused on SaaS companies, Lighter Capital offers RBF between $50,000 and $3 million with no equity dilution. They’re ideal for startups that are growing steadily but want to avoid giving up control.
• Capchase: Specializing in helping recurring revenue businesses, Capchase allows companies to access future revenue upfront. This provides immediate working capital without selling equity or taking on traditional debt.
• Bigfoot Capital: Based in Colorado, Bigfoot Capital provides flexible RBF solutions for early-stage SaaS companies that need growth capital but prefer non-dilutive financing.
• Uncapped: A UK-based RBF fund, Uncapped provides revenue-based funding options to founders across Europe and the U.S., with no interest or equity. Repayments are a fixed percentage of monthly revenue.

However, RBF isn’t for every startup. If your business model relies on large, long-term growth phases (like deep-tech or biotech), where revenue may be years away, RBF may not be feasible. But for SaaS companies or e-commerce startups with recurring revenues, this can be a viable option to scale without sacrificing ownership​.

Thank you for your support!

Dawson J. Racek