Green dreams, red numbers.

Hey guys! Finally Friday and time for another Capitaholic piece. 

The markets are starting to freak out about the level of Capitaholism in the AI-industry. Even a badass quarterly report from Nvidia couldn’t break the nervous pattern.

With Capitaholic glasses on, you end up seeing interesting things every day. I’m either in an algorithmic bubble on Linkedin, or I see a surge in ideas and arguments on building companies financially sustainable and dare to bootstrap.

This great post by Gorilla Capital (who I mentioned last week) is as quick to read as it is good to grasp (read the picture).

Ramp raises $300 million at a $32B valuation. Kudos!

Now read this with your Capitaholic Anonymous glasses on (This is copied from the Techcrunch site): This is just a few months after a $500 million Series E-2 at a $22.5 billion valuation led by Iconiq, announced on July 30. That round was just a few weeks after a $200 million Series E at a $16 billion valuation led by Founders Fund, announced in mid-June. And that Series E was just three months after a $150 million secondary share sale at a $13 billion valuation in March.

It’s impossible not to read it with the ironic, almost satirical, voice in my head.

They have hit 1 billion USD in ARR. They’re obviously not profitable so a P/E number wouldn’t make sense. But the P/S is at 32x. That’s ridiculous. They have raised a total of 2,3 billion USD so far. For what? Now read the post from Gorilla Capital again. The hangover will be tough I think.

Todays topic is on building financially sustainable sustainability companies. Because that makes perfect sense, right? Especially now when capital doesn’t care anymore. I hope you find it as a good read.

The impact sector is arguably facing the most severe crisis in the startup ecosystem today. On behalf of the Swedish Business newspaper Dagens Industri, the Business Information Company “UC” has reviewed the bankruptcies in the sector in Sweden and found that they increased by 37% from 2023 to 2024. Both large and small companies have gone under, and many of those still alive are fighting for survival.

In the first half of 2025, sustainable (ESG) funds saw modest net inflows of about USD 16 billion, a sharp decline compared to over USD 100 billion in recent full years. In Q3 2025, however, global sustainable funds experienced net outflows of approximately USD 55 billion, signalling a deeper pull-back from investors. 

The green premium is gone.

Capitaholic is the state when venture capital intoxicates us. First, we get a high from the initial funding. Validation from investors instead of customers. The company grows measured by metrics like headcount and burn rate.

This leads to a dependency on capital that feels quite comfortable as long as the money keeps coming in. But the best way to describe it is that it’s the same strategy babies use to keep their diapers warm.

Then, when the micro or macro winds shift - as they now have for the industry we should all care about the most - the rug is pulled out from under these companies. Companies whose mission is, in this case, to make the Earth a better place to live on - or even a place that is possible to live on at all. 

Time for a diaper change.

This is the fault of capital and portfolio strategies. Short fund cycles and a model where one out of ten companies is expected to generate all the returns for the fund, while the rest are essentially expected to floor it into the grave. 2x the money in 5 years isn’t enough. 50x or zero, please. 

Time to go diaper-free.

In the very large companies, you can glimpse an almost pyramid-scheme-like investment behavior, where you can make money as long as you’re not the last one in. Value is based on funding rounds, not on the actual value the company creates. It works - until it doesn’t - and then the house of cards collapses quickly.

Impact companies are needed more now than ever. As person after person turns their back on the climate to continue swimming downstream now that the current has turned, it is up to us to accept that the direction is now upstream. The capital is no longer here to the same extent. It’s locked into the likes of Stegra (the swedish green iron project), and burned up in the likes of Northvolt (The Swedish battery factory that burned through 15 billion Euro before declaring bankruptcy). It’s invested in companies that are still fighting for survival but have not yet released capital through the crucial exits that the VC ecosystem depends on (and I am questioning).

So what should you do? Run toward LLMs and jump on the next big Capitaholic industry? Or start building from the ground up - profitable and sustainable? We cannot build companies meant to save the planet and humanity’s future if they themselves are not built in an economically and operationally sustainable way. It’s like having a personal trainer who has never trained themselves.

We need an industry of companies that find their reason for existence without a “green premium” and without the “hype”. A right to exist rooted in economic sustainability. Nothing else.

The companies that are still alive must now go through a painful Capitaholic Rehab to break their dependency on capital. It comes down to a simple, but often brutal, equation: lower costs than revenue. If that’s not possible, then reconstruction or bankruptcy is the only option. If there is still a founder who hasn’t yet been taught that it is never too late to give up, maybe he or she will dare to pick up the pieces and start over. And then a new strategy is needed.

When it comes to impact, many ideas actually do need capital in order to take shape and reach the market - not everything is software. But then we all need to get a bit more creative together. This does not only rest on the shoulders of entrepreneurs, it also rests on investors. Together, we can create a new venture capital model that aligns with how truly sustainable sustainability companies are built - aligning both growth expectations and the expected time to achieve Product-Market Fit. It will likely require a different type of investor. Investors who invest from their own balance sheets, not through a fund. Angel investors who are willing to commit to a 15-year journey. Founders who do not scale just because they receive capital, but instead become more creative through capital constraints, and thus build as capital-efficiently as possible. Speed and growth are expensive. If we stop investing in those and instead start investing in Product-Market Fit and in a product that actually works, we will have a more sustainable financing model for impact companies.

It is when everyone is swimming in one direction that it is time for you to swim in the other. Swimming upstream is how you build muscle, resilience, and endurance. The need for impact companies has never been greater. The climate does not follow public opinion - it keeps swimming upstream too. And if you swim upstream long enough, you will eventually become the personal trainer you always wished you had. The one who makes sure that Mother Earth does not give up in her own fight against the current.

Till next time,

Jacob Kihlbaum on behalf of Capitaholic Anonymous