It’s a new year and a brand new decade. I know it’s cheesy, but I’ve gotta say it – the best is yet to come!
I believe that life gets better with the right attitude and a smart strategy. But in the world of angel investing, these words are especially true.
Breakthroughs in technology along with new consumer behaviors are going to provide investors brilliant opportunities in 2020 and the years to come.
I cannot stress this point enough—in the world of angel investing, the single best thing you can do to improve your chances of huge returns are to identify an emerging trend.
For me and other members of The Boardroom, that meant targeting startups in cannabis (where we made $8,000,000), green technology ($3,000,000), and medtech ($500,000 in just a few months).
Many of the verticals that defined the past decade (such as cannabis) are now busting. In their wake, a new wave of startups are stepping up to the plate.
So where do you go to look?
The Boardroom did our homework, and in honor of the New Year, we’ve put together a special article series just for you about the future hotspots of angel investing.
We’re calling it The 6 Startup Sectors That Will Dominate 2020—And The Decade.
And we think you’re going to find the first sector really surprising. It’s been around for a while… But it’s ready to blow up again right now.
Sector 1 – Clean Technology
I’m sure you’re familiar with green technology. That includes green energy, environmentally friendly products, and software aimed at reducing inefficiency.
Marin Katusa, one of the most recent celebrity angels to visit The Boardroom, has even said that he doesn’t invest in green energy anymore (specifically wind and solar), because the industries are too mature.
But there is a whole world of investing opportunities beyond wind and solar, and we think this market is really just starting to open up.
As a society, we are increasingly aware of our impact on the environment and the very real financial and human consequences. Carbon pollution (the culprit behind global warming) is just one aspect of this. Plastic waste, e-waste, and agricultural waste are increasingly impacting human behaviors and wallets.
Just look at a recent move by China to stop accepting American plastic waste (which we shipped over as recycling). Suddenly, there are tanker ships of used plastic just bouncing from port to port, looking for someone to take their cargo.
Events like this drive businesses and consumers to find or create solutions.
“Green” alternatives have been around for decades, we believe this market is only just gaining a foothold. The key? Green does not need to mean “more expensive” anymore.
Just look at the success of hybrid and electric vehicles like the Toyota Prius, Chevy Volt, and Tesla 3 (which currently holds the title of the fastest-selling car in the U.S. & Canada). These vehicles offered increased fuel economy and quality at affordable prices
In fact, there is over $1 trillion worth of cost-positive energy-saving cuts that businesses could make. And there’s a new wave of startups stepping up to the plate to innovate “clean” solutions that leverage green technology to solve old problems.
There are really three categories of startups that we’ve identified under the label of “clean” technology: energy, software, and consumer products.
Green energy has been a hot startup vertical for ten if not twenty years. And while much of this market has matured, there is still a huge wave of innovation come. Early-stage startups are working on everything from turning algae into fuel to harnessing cold fusion. We’re particularly interested in energy storage technology, bio-energy, and waste-to-energy startups.
Energy storage technology is going to continue to march forward as we move away from fossil fuels, and we see strong acquisition prospects for battery tech startups, including fuel cells and advanced lithium ion technology. Moreover, with our national energy grid in shambles, we expect to see a strong push from the government and military sectors to develop storage technology.
Bio-energy and waste-to-energy startups are nothing new, either. What has changed in recent years is our ability to understand and manipulate genetic code, along with the dawning awareness that the life forms which have been generating and storing energy for billions of years (cough, plants, cough) are incomparably more efficient than anything we could engineer from scratch.
No discussion of emerging verticals would be complete without mentioning software. Much of the inefficiencies that cost people and businesses money also result in energy waste or pollution. That’s where the next generation of software startups come into play.
Take Ekotrope, for example, which helps builders increase the energy efficiency of their buildings. This scrappy little SaaS startup launched in 2011 and grew slowly for the better part of a decade. However, more recent shifts in business practices has increased the demand for their solution, and their growth has skyrocketed to 100% year over year.
Consumer Product Innovation
Finally, new buying habits (e-commerce), consumer sentiments, and technology are shaking up even the most entrenched consumer product markets. Alternatives to plastic (such as compostable utensils and paper straws) are popping up virtually overnight. Electric vehicles such as bikes and scooters are replacing gas-powered vehicles in urban centers.
One of our favorite startups in The Boardroom deal flow epitomizes this trend. This startup—whose name we cannot disclose—has created tablets that turn tap water into household cleaning agents.
This startup is a perfect example of how a clean product can benefit consumers and the environment. The tablets can be used in any container, from a bucket to an old spray bottle, eliminating plastic waste. Because the tablets are much lighter and smaller than full bottles of cleaning product, they are cheaper to ship and store, which passes savings on to the consumer. Finally, they can be sold as a subscription-based product, which adds a layer of convenience for the customer—as well as a guaranteed revenue stream for the company.
What we are looking at here is a startup that is leveraging existing technologies to create efficiency. And that’s where we think the big wins will come in 2020, and beyond. Not necessarily mighty technological breakthroughs, but “cleaner,” more clever approaches to consumer products that have traditionally created waste.
Want to claim your slice of our “cleaning products of the future” startup? Join The Boardroom VIP to be one of the first people to invest when the deal goes live.
The green revolution has been slow in coming, but it does seem like we have finally reached a technological and social breaking point.
While there will be plenty of investment opportunities with traditionally “green” businesses (aka wind and solar), we think the real wins will come as new technologies and materials offer both economic and environmental benefits.
Our series on the 6 Startup Sectors that will dominate 2020 will continue in our next newsletter. And I promise this next article will be an extra tasty one.