We are living through a grand paradox. On one hand, global summits like COP and the G20 scream that trillions of dollars are needed to hit the UN Sustainable Development Goals (SDGs) by 2030. On the other hand, I sit in meetings with brilliant founders in Jakarta, Ho Chi Minh City, and Colombo who are building physical, atoms-not-bits solutions, and they are starving for capital.

Why? Because the funding gap isn’t just about a lack of money. It’s a fragmentation of intelligence. After reviewing 10,000 pitch decks and holding 5,000 founder meetings, I’ve realised that we’ve built a system so bureaucratic and dysfunctional that the very people we need to save the planet are spending 40 per cent of their time navigating a capital labyrinth instead of engineering solutions for goal 7 (clean energy) or goal 13 (climate action).

The three invisible barriers killing hardtech impact

When you build a SaaS platform, the path is linear: Seed, Series A, Series B. But when you build a physical solution—like a botanical biorefinery in Bali or a blue carbon platform in Vietnam—the software playbook fails. Here is why:

The compliance tax and the reporting trap

Many impact funds, especially those tied to Multilateral Development Banks (MDBs) or large NGOs, come with strings that would choke a late-stage corporate, let alone a five-person startup.

I’ve seen founders win a US$150k grant only to realise they need to hire a full-time compliance officer just to manage the quarterly reporting metrics required by the donor. This is a resource drain that favours consultancy-style startups over engineering-style startups. We are inadvertently funding people who are good at writing reports, not people who are good at fixing the ocean.

Geopolitical and sector-specific information deserts

The capital stack is not a ladder; it’s a spiderweb. To survive, a founder needs to weave together:

Technical assistance (TA): Like the Blue Carbon Accelerator Fund (BCAF) for feasibility.
Non-dilutive grants: Like the USAID-funded Climate Solutions or the IUCN’s biodiversity calls.
Concessional debt: From foundations like Beneficial Returns or The Rockefeller Foundation.
Equity: From VCs who actually understand hardtech lifecycles.

The dysfunction: Currently, there is no single source of truth. A founder in Vietnam building a regenerative aquaculture system has to search through 1,000 PDFs and closed-door networks to find these sources. If you don’t have a sherpa or an expensive consultant, you simply don’t find the money.

The atoms vs bits valuation friction

Standard VCs want 10x returns in five to seven years. Physical science-led solutions (deeptech) often need 10 years just to reach commercial scale. Because founders don’t understand the capital stack, they often take VC money too early, get diluted into oblivion, and the company collapses under the weight of software-speed expectations.

Also Read: Why I’m trading bytes for atoms: The 65-year-old investor breaking the climate tech silos

The real-world friction: Two scenarios

To show how broken this is, let’s look at the theoretical paperwork mountain founders face today:

The blue carbon play (Indonesia/Vietnam): A founder building an IoT-verified mangrove restoration needs US$2M. They find a potential grant from the Global Environment Facility (GEF). But the GEF requires a government endorsement letter. The founder spends six months in ministerial waiting rooms in Jakarta, only to find the grant window has closed. They then pivot to a CVC (Corporate Venture Capital) play, but the CVC won’t move until there is a first-loss guarantee from an NGO. The founder is now a full-time diplomat, not an entrepreneur.
The agtech engineer (India/Sri Lanka): A founder has a low-cost, solar-powered biorefinery. They look at the Asian Development Bank (ADB) funds. The ADB is massive, but the entry point for a startup is invisible. They end up chasing impact-linked loans where the interest rate drops if they hit SDG targets. It sounds great, until they realise the verification audit costs more than the interest savings.

The solution: A call for information infrastructure

We are architecting capital, but we haven’t yet architected the information portal to deliver it.

I am calling on my fellow fundraising angels, investors, and the tech community: We must build a global impact portal. We need a searchable, AI-driven command centre where a founder can type: “I am a startup in Vietnam, building a seaweed-based plastic alternative. Show me every grant, technical assistance provider, NGO loan, and Hardtech VC active in my region right now.”

If we can build complex algorithms to predict what movie you want to watch on a Friday night, we can certainly build a directory that helps a climate-tech founder find a grant in Bali or a lab in Colombo.

Also Read: Why perfect carbon audits could cripple climate finance — and what to fix instead

The founder’s cheat sheet: Five questions to ask before taking your first dollar

Before you sign that term sheet or spend six months on a grant application, ask yourself these five questions to ensure you aren’t walking into a trap:

Is this patient or pressured capital? Does the funder understand that hardware takes 3x longer than software? If they expect a pivot to SaaS in 18 months, run.
What is the compliance-to-capital ratio? Will the reporting requirements for this US$50k grant cost you US$60k in engineering hours and administrative overhead?
Does this money unlock the next level of the stack? Will this grant provide the Technical Assistance (TA) needed to make you bankable for a concessional loan later?
Are you solving for the goal or the grant? Are you tweaking your technology just to fit a specific NGO’s mandate, or does the funding truly support your core engineering roadmap?
Is there a first-loss guarantee? Can this foundation or NGO provide a guarantee that makes it safer for a commercial bank or VC to follow them?

The status quo is a tax on our future. To the governments and the NGOs: Simplify your entry points. To the founders: Stop being accidental fundseekers and start being architects of your own capital stack.

Let’s stop talking about the gap and start building the map.

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The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of e27.

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