Earthshot Labs’ Playbook: How to Turn Complex Science into an Investable Asset Class

Earthshot Labs’ Playbook: How to Turn Complex Science into an Investable Asset Class

Converting scientific innovation into institutional-grade financial products might be the most challenging GTM problem in climate tech. In a recent episode of Category Visionaries, Troy Carter of Earthshot Labs revealed their three-part framework for bridging this gap.

Building the Technical Foundation

Earthshot’s journey began with a crucial insight: institutional investors need sophisticated risk assessment tools before deploying capital. Their solution combines two distinct technical approaches:

First, traditional data analysis. As Troy explains, they use “satellite imagery, you use ground truth data, people collect data, measurements by hand of trees, and then you do basically machine learning and statistics to project lines in the future.”

But their real differentiation comes from their second approach: “process-based modeling” that creates “a mathematical model of the ecosystem itself, which is taking things like photosynthesis and evaporranspiration, and all the biochemical processes like enzymatic processes and nutrient exchange with the soil, and competition between different species.”

Creating Financial Infrastructure

With technical capabilities in place, Earthshot focused on building three essential pieces of financial infrastructure:

1. Risk Assessment Framework: “The first is that we have a strong diligence process with a well understood quantitative risk framework to assess project viability.”
2. Project Finance Vehicle: They developed “an early stage project finance facility that invests in the projects from the very early stages and gets them to the point where they’re derisked and generating credits.”
3. Liquidity Solutions: Understanding that “investors don’t have to hold projects for 30 years, but actually can get liquidity,” they’re creating secondary market opportunities.

Monetization Strategy

Earthshot’s revenue model aligns incentives across stakeholders. Troy explains they make money by “taking a commission on those investments and taking a credit share in those projects so that our incentives are aligned and in some cases, just getting paid for carbon development services.”

This approach helps them capture value throughout the project lifecycle while maintaining long-term alignment with investors and project developers.

Real-World Implementation

Their Panama project demonstrates this framework in action. Troy describes it as “about a 10,000 hectare reforestation project… That was former cattle ranching land, where the cattle ranching became unprofitable.” The project received “upfront financing from different philanthropic organizations and corporations” and generates carbon credits that are “shared mostly with the farmers themselves.”

Future Vision

Looking ahead, Earthshot aims to democratize access to conservation investment. Troy envisions a future where “normal people [can] invest with their pensions and 401k in a security that actually directly catalyzes project development in nature restoration.”

For B2B founders working to transform complex technical capabilities into institutional-grade products, Earthshot’s playbook offers valuable lessons:

1. Build sophisticated technical capabilities that directly address institutional risk assessment needs
2. Create financial infrastructure that makes your innovation accessible to traditional investors
3. Design revenue models that align incentives across stakeholders
4. Demonstrate success with flagship projects before scaling
5. Keep sight of the broader vision that can attract both talent and capital

By following this framework, Earthshot has positioned itself to achieve ambitious goals: enabling “the planting of more than a billion trees, more than 50 million hectares under conservation, and more than 100 million tons of CO2 drawn down from the atmosphere” by 2030.