Plenty of the startup companies approaching Clean Energy Ventures for funding promised to cut carbon emissions. But when asked how much they could cut, they didn’t know.

So the venture capital firm built a calculator to find out. Now it’s making that tool available for anyone to use online, hoping to make climate-friendly investing a little easier for entrepreneurs and venture capitalists alike.

The calculator asks applicants six questions, then estimates how much their proposed product or service can cut the world’s greenhouse gas emissions by 2050.

For Clean Energy Ventures, it’s a key way to weed through the many startups seeking funding. The firm will only invest in companies with major potential: each mitigating 2.5 gigatons or more by 2050, said managing director David Miller.

“We’d end up spending a lot of time with a company and realizing they’re not even close,” Miller said.

Any startup wanting to use the calculator needs to do some homework first. The tool asks, for example, how much a single unit of the company’s product or service will reduce electricity demand on the grid in a single year. If the startup’s product has an impact on emissions not directly related to the grid, the applicant has to enter an estimate of annual emissions the product can save.

Easy Way
The calculator then asks how many units the startup hopes to sell once it reaches scale, and how long it will take to get there. If the results look promising, Clean Energy Ventures will check the startup’s math to make sure they’re not being overly optimistic, Miller said.

The Cleantech Open and Cleantech Scandinavia accelerator programs are now using the calculator, according to Clean Energy Ventures.

Nth Cycle, a startup whose technology extracts key materials from e-waste and used batteries, passed the calculator’s test. The Boston company landed $3.2 million in seed funding from investors led by Clean Energy Ventures after the tool estimated that Nth Cycle’s product could cut 3.8 gigatons of emissions by 2050, said Chief Executive Officer Megan O’Connor. The company’s own internal estimate had been 3.6 gigatons.

“We struggled for years to develop our own internal model, which investors probably wouldn’t trust as much,” she said. O’Connor said the calculator could help prospective investors to see her company’s potential. “It’s just a really easy way to show them the numbers in ways they understand,” she said.

This article was provided by Bloomberg News.