Directing charitable gifts toward startups

By Sacha Pfeiffer

Among entrepreneurs, there’s a dreaded place called the Valley of Death. That’s where startup companies go when they run out of funding before making money on their own, and it’s an especially common fate for clean-energy startups, like manufacturers of solar panels and wind turbines.

Those technologies are often pricier, riskier, and slower to produce revenue than, say, an app built on lines of code, which means they must find so-called patient capital from investors who are not expecting an immediate financial return.

But what if that early-stage, high-risk financing could instead come from philanthropists, who aren’t driven by profit? Later, traditional investors could step in and supply continued funding.

That’s the concept behind PRIME Coalition, a year-old Cambridge nonprofit that has pooled $1 million from wealthy donors, including Hollywood actors Will and Jada Pinkett Smith, as seed money for its first investment: an energy storage startup company.

“It doesn’t sound right at first to be supporting a venture that’s trying to be commercially viable with philanthropic dollars,” said Liesel Pritzker Simmons, a mega-millionaire heiress of the Hyatt Hotels fortune who cofounded a Cambridge investment firm, Blue Haven Initiative, that helps fund PRIME.

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