The following interview is a conversation we had with Allen Kramer, Co-Founder and COO of Crux, on our podcast Category Visionaries. You can view the full episode here: $27 Million Raised to Power the Future of Sustainable Finance
Brett
Hey, everyone, and welcome back to Category Visionaries. Today we’re speaking with Allen Kramer, Co-Founder and COO of Crux, a sustainable finance platform that’s raised over 27 million in funding. Allen, what’s going on today?
Allen Kramer
It’s great. Great to be here. Excited for the conversation.
Brett
I’m super excited as well. So let’s go ahead and talk about your first company, Mobilize, which I understand you started in 2017, I believe, and then you sold. Talk to us about that company.
Allen Kramer
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, as you said, in 2017. Really another mission driven company. Building a 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.
Allen Kramer
It’s funny, I often get recruited for volunteer actions or whatever, and people still send me mobilize links, which it’s very fun to see it living on and continuing to grow.
Brett
That’s amazing. Was that a hard decision to sell the company, or is the offer just so good and so compelling and the timing was right that it just made perfect sense.
Allen Kramer
It’s never an easy decision, and 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’s 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. Bye. 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.
Brett
What did you learn from that exit? And let’s talk about negotiating the deal, all of that. Can you take us behind the scenes as much as you’re able to talk to us about that process and what was learned from that process?
Allen Kramer
We should probably skip that one.
Brett
As I was saying, that’s like, it’s probably what a couple years can’t talk about yet. What could I ask you about the exit? Is there anything that we can touch on there? Like maybe just lessons learned from the exit itself or has that put you in bad territory?
Allen Kramer
I’m just trying to think about when I’ve talked to, like, founders do ask me this all the time, and. But I haven’t thought about a public position on this.
Brett
I can just skip it too, if it’s going to put it.
Allen Kramer
It’s very interesting, I’d say. Is there anything that I can say? There’s sort of like the timing as everything point, but that I can do a very high level answer on what I would think about optimizing for there. Okay, perfect.
Brett
And when it comes to that exit, what did you learn from that process? Anything that you would have wanted to maybe optimize or change?
Allen Kramer
No, I think 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, most importantly, was finding the right partner that could really carry on the mission of the business and scale it. And those were all of the things that 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.
Allen Kramer
But those were some of the key things that for anyone that’s listening that may be thinking about this, those were some of the things that we thought about.
Brett
And then did you join the organization? Were you working there for a couple of years or were you done after the exit?
Allen Kramer
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 in a solid place, steady home, and then left as you.
Brett
Were there, did you start to have all these ideas in the back of your head of new ideas, new companies to build a. Or did you want to just take some time off and maybe chill a little bit and relax?
Allen Kramer
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 the, a lot of the lessons learned from that company and was very helpful to distill some of those lessons and think through company building to get ready to do it again.
Brett
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.
Allen Kramer
Yeah. So our mission is to make sustainable finance more efficient and interconnected. And we’re starting to 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 in 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, but 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.
Allen Kramer
So I’ve started here and we’ll sort of expand from there.
Brett
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.
Allen Kramer
So Alfred and I. So after we sold mobilize, Alfred went into the Treasury Department, where he had started his career. And after he left, the inflation Reduction act passed. 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 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.
Allen Kramer
And so we really, 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 leverage marketplace experience, that we had Alfred’s background in policy and also in finance, and then, of course, build out a team with deep expertise from tax and renewable energy and energy finance.
Brett
From the day you launched until the first paying customer, how much time passed?
Allen Kramer
So one of the things that was 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 were getting going. We were building the early team, 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, that give people the confidence to begin to transact in this new market took some time. It was this very unique moment in building, where we could lay a lot of foundation, do a lot of customer research upfront, start to build some of the infrastructure and foundations that we’d need.
Allen Kramer
But then the market really opened up over the course of mid to late Q three of last year into Q four, and from there, it’s just exploded. It was over the course of that sort of marketing market opening up that we really started to transact and realize revenue as a company.
Brett
And who’s the ICP today? And what was the process like to uncover that ICP and get clarity on that ICP?
Allen Kramer
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, you know, very small. They’re selling $100,000 of credits. The smallest transaction that’s closed on 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, 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 up to the Fortune 100.
Allen Kramer
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 of 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.
Allen Kramer
And so I’d say the set of icps there is in some cases wider.
Brett
And what’s the marketing strategy look like to connect with those different Personas.
Allen Kramer
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 and is now joined as our head of growth. Was one of our early hires at Crux 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 the leading market intelligence on this new market. Things like pricing reports, objective, standardized data on how people are conducting these transactions. Especially for something like a new asset class, it’s been really important to lead with insights, lead with a unique take on the market, and an objective perspective. That’s been a critical component of how we’ve gone to market and how we’ve really built up our brand here.
Allen Kramer
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.
Brett
So one theme that I’ve picked up on here is these 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? Because 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?
Allen Kramer
That’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.
Allen Kramer
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.
Brett
Again, you mentioned debates there with Alfred. Tell us about some of those debates and how you manage conflict.
Allen Kramer
I think one of the things that works so well in my partnership with Alfred is that we are very different. There are a lot of ways in which we’re similar, but that we think very differently about the world in certain ways. And we push each other to kind of see the other’s perspective and then often end up finding that one of us convinces the other, or we end up finding that 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?
Allen Kramer
What are we seeing in the data? And then really assessing where we need to be going.
Brett
What about your category? Is it sustainable finance? Or how are you thinking about the market category that you’re in?
Allen Kramer
Yeah. Today our primary business is in this broader new transferable tax credit market, which I’d think of as sort of a subsegment of broader sustainable finance that may include all kinds of different financial products, debt, equity, et cetera. And as I mentioned, the transferable tax credits form a critical component of the capital stack for renewable energy development in the country. And so I’d really think about us as principally playing there today and expanding over time and within the tax credit market, you think about this as really a critical piece of how these get financed. But ultimately, people need to learn how to do this. Again, as I mentioned. This is a new asset class. This is something where I’m totally flubbing this. I want to cut this.
Brett
No worries, ask it again. Fresh.
Allen Kramer
Yeah, that sounds great.
Brett
What about your market category? Is it sustainable finance? Or how are you thinking about the market category?
Allen Kramer
Yeah, I think about 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. And that sits within a broader category of sustainable finance that may include all types of other financial products, debt, instruments, equity, and beyond that.
Brett
What about go to market decisions that have had a major impact, or maybe just ask that a better way. What’s the most important go to market decision that you’ve made so far?
Allen Kramer
I think a critical early decision was that we wanted to partner very closely with players like banks, tax advisors, major institutional players, that were 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 and 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 were going to help their clients.
Allen Kramer
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 helped 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.
Brett
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?
Allen Kramer
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. Ian Samuels from new system Ventures had invested in our last company, Shamiq Dutta from Overture. But previously higher ground Labs had invested in our last company. So 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 Andreessen Horowitz, who led our Series A. And it’s been great to meet new people.
Allen Kramer
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 LS 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.
Brett
How does fundraising compare today to 2017 with mobilize?
Allen Kramer
Certainly having sold one company together before was very helpful, both 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 and I think gets people pretty excited.
Brett
Final question for you. Let’s zoom out three to five years into the future. What’s the big picture vision look like?
Allen Kramer
So certainly around the transferable 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 I transaction and closing experience is much more standardized and looks something like the ISDA 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.
Allen Kramer
And so it’s going to 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.
Brett
Amazing. Love the vision. All right. We are up on time, so we’re going to wrap here. Before we do, if there’s any founders that are listening in, they feel inspired, they want to follow along. Where should they go?
Allen Kramer
You can find us on LinkedIn. We’re very active. Post a lot of great content there, so that’s probably the best place.
Brett
Amazing. Allen, thanks so much for taking the time. It’s been a lot of fun.
Allen Kramer
Thank you, Brett.
Brett
All right, that was awesome. You’re a great guest.
Allen Kramer
I think that was okay. I did okay.
Brett
You want to redo any parts? We still have recording going, so I’m happy to just ask some questions again if you want to redo anything.
Allen Kramer
I’m trying to think if there’s anything that felt particularly off. I’m trying to think if there’s anything that we didn’t hit that we could have. I think it was good. Hopefully some of my answers weren’t overly generic, but it was definitely a fun conversation.
Brett
Yeah, they didn’t feel overly generic. There’s some founders.
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