Inside Persefoni’s Strategic Investor Selection: Why They Said No to Silicon Valley Money

Inside Persefoni’s Strategic Investor Selection: Why They Said No to Silicon Valley Money

2021’s funding environment was awash with capital, particularly from crossover funds eager to invest in climate tech. Yet in a recent episode of Category Visionaries, Persefoni’s founder Kentaro Kawamori revealed why they deliberately chose a different path.

The Unconventional Choice “I was very intentional not to take capital from crossover funds or Silicon Valley software weighted funds for various reasons,” Kentaro explains. This decision wasn’t about avoiding Silicon Valley entirely, but about finding investors who could contribute more than just capital.

Beyond the Money The reasoning was straightforward: “The last thing I want to do as a Founder and CEO is spend my time educating my investors on where the market’s heading. I want my investors to be able to help educate me,” Kentaro emphasizes. This perspective shaped their entire fundraising strategy.

Building the Right Cap Table Instead of chasing the highest valuations, Persefoni assembled a strategic cap table. “Our biggest investor is TPG, a large private equity firm which has a dedicated ESG and climate investing platform,” Kentaro notes. Their roster includes climate and energy tech-focused investors like Prelude Ventures and the Rice Investment Group, alongside strategic corporate investors like Bain and Company, EDF (Europe’s largest utility), and SMBC, a major Japanese bank.

Avoiding the Crossover Fund Trap Kentaro’s skepticism about crossover funds proved prescient. “Taking 50% losses in a year, that’s a really dangerous proposition for an entrepreneur to have an investor on the cap table that’s going to go through that sort of volatility,” he explains. “That’s where a lot of weirdness and board disruption happens, and we certainly never wanted to undertake that.”

Market Understanding Over Market Size The decision went deeper than avoiding volatility. In 2021, Kentaro observed that “Silicon Valley investors were extremely under educated on climate tech and on our category specifically.” This knowledge gap would have required significant time investment from the leadership team to educate investors, rather than leveraging investor expertise to accelerate growth.

The Preemptive Series B The value of this approach became clear when Prelude Ventures preempted their Series B. As Kentaro explains, “They’d had this thesis for many years, but the market timing hadn’t been right and they hadn’t found a management team that they also thought was the right one for the right time.”

Results That Validate The strategy paid off. Persefoni grew from about a dozen customers at the beginning of 2022 to over 200 by early 2023. Their investors’ deep understanding of climate tech and regulatory environments helped navigate complex market dynamics as carbon accounting shifted from optional to mandatory.

For B2B founders, particularly those building in emerging categories, Persefoni’s approach offers a valuable lesson: sometimes the best capital isn’t the most available or highest-valued, but the most strategically aligned. In category creation, having investors who understand your market can be more valuable than those offering the biggest checks.

As Kentaro puts it, when building a new category, you’re either going to be “phenomenally right or phenomenally wrong.” Having investors who deeply understand your market increases your odds of being right.