Private Capital Financing Options for Climate Relevant SMEs and Startups Beyond Equity Deals

The global financing landscape for startups and SMEs in emerging markets presents both opportunities and challenges. Traditional bank financing is often inadequate, while private funding typically focuses on classic equity deals, which don’t always meet the unique needs of these enterprises. Due to their diverse structures and growth stages, startups and SMEs require a broader range of financing options to promote economic growth, particularly in development cooperation.

This paper explores alternative financing methods, such as Corporate Venture Capital (CVC), Venture Studios, Venture Debt, Web3.0-based financing through DAOs, and Carbon Credit-based financing. These options are especially relevant for emerging markets, with a focus on the African ecosystem, though applicable more broadly. The paper aims to equip entrepreneurs and development practitioners with insights into these alternatives to help startups and SMEs overcome financial barriers, secure funding, and contribute to economic and social development.