The future of venture capital (VC) is sustainable, inclusive, and transformative. At Antler, we believe this future is built on a foundation of sustainability integrated from the inception stage. While debates around environmental, social, and governance (ESG) and regulatory challenges persist, we are confident that the path to success lies in an approach that is rationed, rational, and grounded in sound rationale—themes we explored in our latest sustainability report.
How we define sustainability at Antler
Sustainability is often misunderstood as purely environmental, but it encompasses much more. At its core, it is a dynamic system that balances human needs, environmental health, and economic systems. Sustainability evolves over time, shaped by changing priorities, narratives, and innovations.
At Antler, we recognize that sustainability cannot be universally defined or applied—it depends on the specific context. For early-stage companies, sustainability involves addressing immediate realities while building toward long-term goals. It reflects the balance between short-term constraints and future ambitions, making it a flexible and evolving concept rather than a fixed target.
Our portfolio analysis suggests that companies integrating sustainability tend to achieve stronger market traction, secure higher valuations, and attract greater external funding. More than a moral or compliance obligation, sustainability appears to offer a strategic advantage in early-stage growth, potentially shaping long-term trajectories.
At Antler, we encourage founders to go beyond traditional balance sheets to explore sustainability factors that may influence company performance and support their business models. Beyond operational sustainability, we actively support founders tackling some of the world’s most urgent challenges, from renewable energy and food security to healthcare and cyber defense, among others. These efforts reflect our broader mission to drive meaningful change across industries and geographies.
Measuring the correlation between sustainability and performance
Sustainability in VC requires more than goodwill. Whether you are a sustainability advocate or skeptic, you are asking the same (and correct) question: Does sustainability add value?
The industry often struggles to provide early-stage evidence that sustainability correlates with performance. We aim to change this. Our data analysis focuses on two primary dimensions of sustainability integration:
- Operational best practices: We assess founder engagement through their participation in sustainability health checks, which reflects their commitment to using sustainability as a success tool. Health check scores gauge a company's internal stability and growth readiness, with scores highlighting key operational strengths.
- Product-led impact: We identify companies with products addressing sustainability challenges, which often achieve market differentiation and early traction by responding to global needs. Recognizing the demand for climate-related tech, we also track climate-tech categorization, given the strong industry interest in this space.
Together, these considerations provide a balanced view of both market potential and operational readiness, important for understanding early-stage success across our portfolio.
Sustainability health check methodology
Antler sustainability health check is an annual assessment that evaluates how well portfolio companies integrate sustainability practices into their business models. It covers five key operational topics:
- Workplace culture and employment practices
- Responsible product design
- Data privacy and cybersecurity
- Environmental impact
- Supply chain management
The assessment is tailored to a company’s growth stage, setting strong sustainability foundations for pre-seed and seed-stage companies and encouraging more mature approaches for Series A and beyond.
Companies receive automated feedback, personalized recommendations, and a performance score categorized as:
- Red: Urgent attention needed—critical risks identified.
- Amber: Progressing—on the right track but with areas for improvement.
- Green: Best practices aligned—strong sustainability integration for the company’s stage.
This feedback, shared with founders, helps guide improvements and ensures companies stay aligned with sustainability best practices as they grow.
This scoring helps founders prioritize improvements while allowing Antler to target support where it’s most needed. Participation is strongly encouraged but not mandatory. The assessment is distributed annually between June and September, with aggregated insights included in fund reports when relevant.
2024 sustainability health checks had a 58% response rate globally. Further details can be found in the latest sustainability report.
How we measure ‘success’
Our approach focuses on metrics that capture growth potential and market traction—key indicators for scaling. For early-stage companies, funding success is a central measure, reflecting scalability and investor confidence. Additionally, average valuation post-money caps and average external capital raised offer insights into market validation, with valuations indicating perceived future potential and capital raised showing investor commitment.
At the pre-seed and seed stages, where the majority of our portfolio is currently allocated, fund-through rates are typically challenging due to the early risk profile of investments. Industry benchmarks indicate that approximately 45-55% of pre-seed-funded startups progress to seed funding, and around 35-40% of seed-funded startups raise a Series A round. It's important to note that these benchmarks can vary significantly based on factors such as industry vertical, geographic region, economic conditions, the quality of the founding team, and the traction achieved by the startup. For instance, startups backed by top-tier investors or those raising larger seed rounds may experience higher conversion rates to Series A.
Industry benchmark data on funding progression rates is derived from multiple sources, including Dealroom.co's “Journey to Series A in Europe,” which highlights seed-to-Series A trends (~19%); global insights from CB Insights, PitchBook, and Crunchbase, offering data across regions but weighted toward the US and Europe; reports from Macdonald Ventures and GoingVC, which estimate US pre-seed to seed conversion rates at ~45-55%, with limited global validation; Antler proprietary research; and Startup Genome ecosystem reports, which highlight regional variations in funding progression rates. Note: Pre-seed to seed conversion rates are less consistently reported globally, and the ~45-55% estimate primarily reflects trends observed in the US and Europe.
By comparison, Antler’s portfolio demonstrates fund-through rates that significantly exceed industry averages, showcasing the strength of Antler’s investment strategy, its ability to identify exceptional founders and its focus on supporting companies with high growth potential.
Sustainability engagement has emerged as a promising factor in driving these outcomes. The following findings illustrate how sustainability practices correlate with funding success, valuations, and broader financial performance across Antler’s portfolio, providing evidence of sustainability’s role as a strategic driver for growth.
Key findings on sustainability’s correlation to performance
Antler data is sourced from portfolio companies and investment teams.Unless otherwise stated (as in Key finding 1), all portfolio companies, including those no longer active, are included in the analysis. "External funding" refers to capital raised outside of Antler. Average valuations consider professional caps; the last round valuation, including convertible instruments from professional investors, is based on the upper price cap of the most recent convertible funding round, if set by an institutional investor. Direct investments from Antler Elevate (Antler’s global later-stage and follow-on investment fund), as opposed to those sourced from Antler regional funds, are excluded from this analysis. While few in number, these investments are more mature and would skew performance data due to their typically higher valuations and greater capital raised. Climate-related tech includes companies whose product outcomes drive positive environmental change across diverse areas—not limited to emissions reduction—by addressing a broad spectrum of climate challenges with innovative solutions. For details on the definition of an impact company and detailed sustainability health check methodology, and results please refer to our 2024 ESG and impact report.
We track Multiple on Invested Capital (MOIC) as an early-stage indicator of value creation. While early-stage MOIC is inherently volatile and shaped by funding structures, our data suggests that sustainability-aligned companies show early outperformance in valuations and capital raised. However, given the evolving nature of young companies, MOIC alone is not a definitive measure of long-term success. As these businesses mature and establish product-market fit, tracking financial performance over time will provide deeper insights into sustainability’s role in delivering returns.
Exploring the link between sustainability and success
While these findings suggest a strong correlation between sustainability focus and performance indicators, they remain correlative rather than causal. Early-stage company performance is shaped by multiple factors, including sector dynamics, economic conditions, and market timing. Sustainability, however, appears to play a key role in increasing resilience, investor confidence, and strategic differentiation.
One of the biggest challenges in measuring sustainability’s impact is attribution—how do we isolate sustainability as the key driver of success? Unlike in established companies, where changes in sustainability practices can be more directly linked to financial performance, early-stage ventures present a more complex picture.
If sustainability is embedded from day one, how do we distinguish its impact on outcomes? Is it enough to track fundraising ability or MOIC? Should we consider broader success indicators like employee retention, external perceptions of culture and governance, or operational resilience? Our data suggests that companies integrating sustainability tend to perform better across key metrics—whether in funding, operational efficiency, or growth potential. Yet, how do we establish a reliable framework for attribution when each company follows a unique path?
As companies grow, their sustainability priorities and material impact areas naturally evolve. What is ‘material’ at an early stage may shift significantly as they scale. This evolving materiality makes each company’s trajectory distinct, requiring a flexible approach to understanding how sustainability impacts performance over time.
These are the questions we continue to explore. To build a more robust framework, we are collaborating with an academic institution, which has developed an MBA case study on our sustainability approach. This partnership aims to refine our attribution methodology and provide deeper insights into sustainability’s role in driving success.
The broader perspective
In an age of increasing uncertainty, rising capital constraints, and heightened investor scrutiny, sustainability should be viewed as a necessity. Early-stage companies that recognize how sustainability can support their success are building the foundation for long-term competitiveness.
It’s easy to be skeptical. Sustainability has become a loaded term, often reduced to attention-grabbing headlines or regulatory checklists. But beneath the noise lies something worth examining: the data. Our findings don’t claim causation, but they do suggest that sustainability considerations correlate with higher funding success, stronger valuations, and greater resilience.
And that should make investors and founders alike pause for thought.
Venture capital thrives on first-mover advantage. If sustainability is even part of the equation for long-term success, can investors afford to ignore it? The reality is that sustainability is complex, evolving, and difficult to measure with perfect precision. Understanding its impact on financial performance requires ongoing analysis and deeper exploration.
The investment industry has always prided itself on cutting through hype to focus on fundamentals. But what if sustainability is fundamental? What if companies that integrate it early are not just doing the “right thing” but are actively outmaneuvering competitors, mitigating risks, and securing better capital flows?
For investors, the question is no longer whether sustainability matters—but how to capture its financial upside. As we consider our fiduciary duty, do we wait for perfect proof and risk missing a structural advantage or act now, as signals and evidence continue to emerge?
History rewards those who anticipate shifts before they become obvious. The challenge is not just in proving the link between sustainability and performance—it is in deciding whether to lead or get left behind.
Read our 2024 annual sustainability report.
Contact Rosalind.Bazany@antler.co with feedback and to learn more about Antler’s sustainability philosophy and strategy. Media recognition: Our findings on the correlation between sustainability and performance were recently featured in New Private Markets, highlighting the growing industry interest in the role of sustainability in venture capital success. Antler was named runner up in New Private Markets 2024 Venture Capital Fund of the Year (ESG).
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