Why we should take a venture approach to protecting nature

Interest in innovative nature finance is rising fast. Conservation groups, financiers and policy-makers are racing to develop biodiversity credits, blockchain-enabled markets and nature-based bonds to mobilize billions in private capital.

Giants like BlackRock and KKR cite natural capital as a strategic theme. The voluntary carbon market has transacted more than $11 billion in credits since its inception. Signatories to the Taskforce on Nature-related Financial Disclosures represent $17.7 trillion in assets under management.

Yet the funding gap persists. While capital is available and interest is growing, the flow of actual money to on-the-ground conservation remains stubbornly limited.

Why? The answer is deceptively simple: most conservation projects aren’t investable. Not because they’re unimportant, but because they weren’t designed with a customer in mind.

Private capital follows cashflows, not good intentions. Philanthropists may fund a compelling ecological case. Investors, however, need repayment – typically from project revenues. And revenues only emerge when someone is willing to pay for the environmental value created.

A project without a paying customer may win grants or awards. But it won’t attract return-seeking capital. This disconnect is the heart of the nature finance bottleneck. Investors are ready. Projects abound. But too few are structured around the economics of who pays, why and how much. Here's why:

Many efforts fall into the Field of Dreams trap: "build it and they will come."

These projects start with a real ecological need – a degraded watershed, a threatened species, for example. Practitioners develop science-driven intervention plans. Only later do they try to retrofit a financial model, hoping the value will be obvious to customers or investors.

But ecological logic doesn’t guarantee financial logic. A water utility may view watershed degradation as a manageable cost, not a crisis. A company might see biodiversity loss as tragic, but not material to its operations. Without a clear customer who is both willing and able to pay, even the best-designed project stalls or survives on subsidies.

The second trap is building the tool before confirming the problem. These efforts often stem from well-meaning but untested assumptions. When uptake lags, it’s rarely because the mechanism is flawed. Instead, it’s often because the customer need was misread.

Take biodiversity credits. Many assume companies aren't funding conservation because outcomes aren't standardized or tradeable. So, they build crediting systems expecting demand to materialize. But if the real barrier is the lack of regulation – or if the value proposition isn’t compelling – no amount of design elegance will fix it.

Blockchain platforms follow a similar pattern. They assume markets are stalled due to opacity or centralization. But buyers may be limited by budget cycles or procurement red tape, not a lack of transparency.

Tools don’t create markets. Customers do.

Investor enthusiasm can be mistaken for traction. But it rarely translates into dollars without evidence of customer demand. Investors may attend events, make public commitments, even join pilots. But they are betting on future cashflows – not creating them.

Real market signals come from paying customers: entities that commit actual funds to environmental outcomes. Without that commitment, investor interest tends to fade under due diligence.

Complex financing vehicles – blended finance, green bonds, pay-for-success models – can also create false confidence. They only add value if they unlock new resources, shift risk or accelerate execution. If the revenue model is shaky, they’re just repackaging philanthropy in fancier wrappers.

The first question in conservation finance shouldn’t be, “How do we pay for this?” It should be, “Who specifically benefits – and why would they pay?”

Private capital only flows when someone sees value and is willing to fund it. That value looks different depending on the buyer:

Each case hinges on a concrete benefit and a clear threshold for action. Without both, the funding case collapses.

If we want to unlock private finance, we need to treat conservation projects like ventures. That starts with real customer discovery: who benefits, what they value and what they’re willing to pay for.

Then, build not the perfect solution, but a minimum viable offer: the smallest credible version of a project that can test demand. This might be a mock credit, a pilot restoration or a visual simulation of future impact.

The goal isn’t to perfect the ecology, it’s to validate the economics. Failure is feedback. If the value proposition falls flat, pivot. If customers engage, scale. This build-measure-learn cycle reduces waste, accelerates insight and grounds conservation in market reality.

Venture studios changed the way startups are built – pairing capital with entrepreneurial teams and a repeatable process to go from idea to market.

That same approach can unlock nature finance.

A nature venture studio starts with demand, not just need. It designs for traction, tests value propositions early, and builds solutions that deliver both ecological outcomes and financial performance.

It’s not a replacement for public funding. Rather, it’s a force multiplier when market logic and conservation goals align.

Not every conservation project should seek private capital. Some outcomes are public goods, and philanthropy or policy will remain essential.

This isn’t about financializing nature. It’s about financing what works.

Where market logic and ecological value align, we have an extraordinary opportunity to design solutions that earn investment, deliver outcomes, and scale impact. The capital is ready. Now we need to earn it.