Podcast - Execution and Iteration: Deep Tech at Scale in Maritime Shipping

Patrick Driscoll: Welcome, everyone, and thanks for tuning in to "The Innovation Imperative." My name is Patrick Driscoll, and I'm the Director of Client Development for Emerging Companies and Venture Capital (VC) at Holland & Knight, where we work closely with founders, VC firms and investors navigating the full life cycle of innovation, from company formation and early fundraising through growth, scaling and ultimately that exit. A big part of our work sits at the intersection of law, capital and strategy, helping innovators and investors think clearly about how they build, fund and protect durable businesses. "The Innovation Imperative" is really about that journey. Each episode we sit down with founders, investors and operators who are shaping the innovation economy, oftentimes behind the scenes, to unpack the real stories, lessons learned and inflection points that don't always show up in pitch decks or press releases. We focus on VC, early-stage companies and the decisions that matter most when the stakes are high.

I'm absolutely stoked by our guest today. This episode focuses on building climate companies, specifically what it takes to decarbonize global shipping and the realities of scaling in sectors defined by long-sale cycles, regulatory complexity, capital intensity and real-world infrastructure constraints. Joining me first is my colleague, Tim Poydenis, who is a partner at Holland & Knight and the co-head of our Emerging Companies and Venture Capital team. He's going to go ahead and lead today's interview. Tim works closely with founders and investors navigating growth and strategic transactions, and he brings a practical, execution-focused perspective to building companies in complex industries. And we are absolutely thrilled to be joined by our special guest, Chase Dwyer, the founder and CEO of Carbon Ridge. Chase is building in one of the most challenging sectors for startups, focused on decarbonizing shipping, and he brings firsthand experience navigating slow-moving markets, operational complexity and the importance of aligning with the right investors and strategic partners along the way. So with that, Tim, let's go ahead and get started.

Tim Poydenis: Super excited to be here again and couldn't be more excited to have Chase join us as a guest. I've had the pleasure of knowing Chase personally and working with him for, at this point now, over half a decade, I believe. So excited to sit down and formalize things a little bit with the podcast interview. Chase, thanks for joining us. I think it'd be helpful for folks to hear your path and then sort of how you got to where you are today with Carbon Ridge and everything else.

Chase Dwyer: Yeah, thanks, Patrick, thanks, Tim. Happy to be on. So I was born and raised in Vermont, grew up ski racing about 30 minutes south of the Canadian border. And I didn't really understand what the whole deal was with climate change until I got to college. I think that it was branded badly when we were in high school, global warming or however it was done. But I took a rhetoric class where our professor made us read Silent Spring and a bunch of these environmental books and I suddenly realized that this thing I cared so much about, ski racing and generally skiing the planet, was kind of a fleeting reality. And when I have kids or grandkids, that might not be a possibility in a lot of places. And I think that kind of shocked my system to go and focus the next foreseeable part of my career on trying to address that issue. But more broadly, I saw it as a really massive opportunity in the energy system space.

And so I started my career working in tax equity around financing wind, solar or battery storage projects. I worked on battery storage development in California. It was around the time I met Tim. And then I got introduced to the shipping industry by a family friend. I knew nothing about shipping. And he started telling me about the industry and he said – I'll never forget it – he said, Chase, the thing you need to understand about shipping is that we're like the incinerator for the global hydrocarbon business. You have a barrel of oil, and at the bottom, you have this heavy sludge material that always ends up – it's called residual fuel oil. We used to burn it back in the 1950s for home heating before the discovery of natural gas. And now ships burn it and they're the only demand for it in the world. And so if ships don't burn it, there's basically nobody that's going to consume this product as long as barrels of oil exist. So in the context of maritime fuel emissions reduction, you need to think of it as, they literally burn a waste product today. So anything you're comparing to has to be able to be close to parity with that.

And I think that was the framing for me. To understand that this emissions problem is so massive and so challenging in maritime, but the maritime industry is actually this very heavily regulated space that has a precedent of adopting these very stringent emission regulations related to sulfur, ballast water regulations, NOx (nitrogen oxide) and now CO₂ (carbon dioxide). And so there is this kind of perfect nexus between not a lot of solutions that are a good fit and a regulatory environment that was demanding solutions be there to kind of fit this need. And so that was really the catalyst to get into shipping and figure out what's the best way to decarbonize this industry.

Tim Poydenis: Wow, that's pretty cool. I didn't know you were quite the skier, too. That's a pretty cool story and background on how you got into it. In terms of Carbon Ridge, your company now specifically, if you're just trying to explain it in layman's terms to some dude you meet at a coffee shop, like, what is Carbon Ridge?

Chase Dwyer: Yeah, we basically build, essentially, modular boxes that go on ships and attach to the funnels of the ship and we pull the flue gas, redirect the flue gas out of the ship, and inside that flue gas you have a little bit of CO₂, a little bit of sulfur and a little bit of NOx that creates, in total, a billion tons of emissions per year. And we use essentially like a sponge in our tank-like device basically, inside that box, that removes and kind of captures the CO₂ and lets the exhaust go back out clean with up to 95 percent of the CO₂ reduced and 99 percent of the sulfur and the NOx reduced. So it's effectively, it's kind of like a catalytic converter for a car basically. Cars emit a lot of NOx, and they invented a catalytic converter that basically removes the NOx in a catalytic function. We do basically the same thing on ships.

Tim Poydenis: Wow, that's pretty wild. My second question, building the company, what was that "aha" moment that founders have where it's like, hey, this thing actually could have legs, this thing is something that we need to jump in on.

Chase Dwyer: Yeah, there's two things. So the first is that there's basically three ways to reduce emissions in maritime, like on a fundamental level. The first is that you can consume less fuel, which emits less CO₂. So you can install wind rotors, you can make your propeller more efficient, you can have a more aerodynamic bow. But those things cap out at 10, 15, 20 percent emissions reduction overall for a ship. Then, on the other end, you could try to burn a different type of fuel, but all those fuels are incredibly expensive, they don't really exist today and there's not really a pathway for them to exist. And a lot of the traction there has kind of faded. And then basically in the middle, you have what we do, which is essentially taking the emissions itself and abating the emissions directly from the ship and letting the ship burn the exact same fuel and operate in the same way, just basically removing the product itself from the exhaust deck. And so that's kind of the fundamental layout. And the catalyst for me was that I realized that the energy-saving devices capped out at a certain amount and the alternative fuels had issues with energy density, were too expensive and really had a lot of different hurdles to get towards development and required the vessels to totally change the way they operated. They required new ships, you can't really retrofit them, so you have 50,000 ships a day that, you know, 90 percent of them, 75 percent at least all need some sort of solution for this. So that was the catalyst.

And then the second piece of it was that the traditional carbon capture technology that's used on land, if you've ever passed by a refinery in Texas, for instance, and seen the giant columns that are in the refineries, that's what you use for these gas separation processes. And so on a ship, you would need to install these massive columns to the ship to do the carbon capture process. We looked at shipping and said, this is kind of like floating real estate. It's like you're trying to lease out as much space as possible and consume as little energy and use up as much space [as possible]. And what we started to find is we needed to find a way to capture the CO₂ that was more modular, took up less space and [was] more energy-efficient. And we realized that you can use centrifuges to do that work. And basically, just to describe it because we've got the technology pieces, the way the centrifuges work is that the traditional columns are a passive process. So basically, the gas and the solvent meet passively. The centrifuges basically intensify the process, so we essentially rotate the process at 400 RPMs (revolutions per minute) and it basically allows us to do much more work in much less space, making them modular, and they're much more energy-efficient.

Tim Poydenis: And then just to like visualize it for myself, like when you're talking about ships, are you talking about like the cargo ship that I see out in the Pacific? Or are you talking about something much more intense, or does it run the gamut?

Chase Dwyer: I mean, it's pretty wide spectrum. It's your cargo ship that's operating from LA to Shanghai. It's your tanker vessel that's right now having issues in the Strait of Hormuz. It's large coastal ferries that are too big for batteries, off-source supply vessels, etc. So the technology, because it's relatively small and modular and relatively energy-efficient, there's a lot of different applications. Generally, though, the bigger the vessel, the better the unit economics for us.

Tim Poydenis: Speaking of economics, this definitely doesn't seem like a company and a technology that you can build without capital. So as most founders know and repeat entrepreneurs and first-time entrepreneurs know, you've got to raise funds somehow. What was sort of your strategy and what was your thought process on finding the right amount of capital, but I think more importantly, the right investors for the company?

Chase Dwyer: Yeah, I mean, I think with these, I guess, hard tech companies generally in energy, all of them take a decent amount of capital to be able to get to speed. And so we knew that that was going to be the case. And we also knew based on what we quickly understood that shipping is a slow inertia business until it's not. And so generally what happens in shipping is that there's this very incremental creep and then all of a sudden there's just a massive catalyst point where it just starts to go in a hockey curve. And so we knew that basically the business needs the right amount of capital to get to that hockey stick moment, right? Until it can, you know, very quickly move through profitability. And so, a large portion of where we found that capital is a lot in family offices that are working in the energy space that are really kind of dedicated to this overall understanding that the world is on this slow path to decarbonize and it needs to be kind of a diverse perspective of how we look at that. And then it's a lot of, you know, owners and operators in the shipping space that a), want the technologies to be there to reduce emissions on their vessels, but then also want priority for when the technologies are there, and so, you know, they're making investments to ensure that those technologies exist and that they have access at the end of the day.

Tim Poydenis: Yeah, that's an interesting one. So I think that you sort of took my next question, but I'll ask it anyways. My question was going to be, when you're raising capital in this industry, what attributes should you look for in an investor? Two that stick out right now are ones that are interested in it and the efficiency of it just for the ecosystem. And I think the second piece is ones that sort of want to be like in the queue to be the first potential users when it's ready.

Chase Dwyer: Yeah, I mean, I think what I generally say is that because these businesses take a longer time than a lot of software businesses, it means that you're building through different cycles, just more across the board, always. You end up seeing different cycles, which means that you have different cycles from a capital markets perspective, where the venture investors are thinking, what the regulatory environment looks like within the market that you are building in, that dictates what investors want to be doing what thing during a different period. So we're always looking at when we look at investors, the question is, are you investing in this company because of the long-term opportunity of what we are saying this is going to be at the end of the day or just because this is what is hot in the current moment? And candidly, we're looking, obviously, for the former because the business needs existing investors and new investors that really understand that what we're building for is thousands of ships that need to be retrofitted and built with these new systems as we move into the later part of this decade and into the next. And it's a kind of scatterplot road as we get there, full of different parts of the journey. But we're very confident in the end outcome there at the end of the day. So we're really looking for investors that share the same overall vision in how this is going to be built.

Tim Poydenis: Yeah, I think that's a great point. And I think it's something that – we probably had this conversation five or six years ago – it runs across every industry. And the phrase that I always use when I'm talking to founders about fundraising is, not all money is created equal, right? For every company, for every business, for every industry, for every stage, like, not every investor is right. So $5 million from Investor A could be wildly more valuable than $5 million from Investor B. So it's interesting to hear that level of granularity in your industry and with Carbon Ridge. In terms of, like, moving on a little bit into now just like the business and like the legal and regulatory landscape, how important is that for you all? It sounds to be sort of at the core of what you're doing. And how do you think about that as the CEO of a business like this of trying to prepare yourself and engage with the right folks to make sure that you have the data points you need?

Chase Dwyer: Yeah, I mean, it's very critical overall, mostly from a directionality perspective for the shipping industry. Most of the way that shipping itself as an industry works is basically they have these ships and they have to comply with hundreds of different regulations, and that's the way that they run their business, essentially. So this is just one of the different regulations that's in there, and so the regulatory framework is quite key. Now, what's interesting for us is that there are other verticals where we're able to generate commercial value for these owners. For instance, there's a growing CO₂ shortage that's happening in the U.S. right now, especially in pockets in the Northeast and the Northwest. And so we're working with partners now to basically fill that gap from vessels actually that are trading into those regions. And the economics actually provide capital recovery for the owners on deploying the systems. And now they have an asset that can be fully decarbonized and also kind of provide this economic value. So we're looking at it from a multifaceted perspective, but at the end of the day, the question really is how can we provide for ship owners, their key thing is flexibility at the end of day for these assets. And so what we look at is how we can provide absolute amount of flexibility for them, whether it's reducing their regulatory penalties, it's allowing them optionality for what fuel they can burn in the future and having our system that can take any type of fuel, right? And so I think that that's really kind of how we think about building the business from there.

And I think the last thing is that from a legal perspective, you can make sure that the regulatory framework includes the solutions and the framework that fits best, but you can't dictate what happens with politics, right? And so you basically build up the right partners and build up the right ecosystem around you to be able to deploy and grow and continue operating through the phases where there's inevitable waiting periods and, you know, ambiguity of what's going to happen.

Tim Poydenis: Yeah, and if you had to say as an operator navigating this landscape, what's been the most challenging aspect of the industry for you and the company in learning to navigate?

Chase Dwyer: You know, it's funny, I'd say the most challenging aspect is the most enjoyable and rewarding aspect, and it's that the, again, the inertia with the shipping industry, it's a very much people's industry, right? It's building trust. It's building this, you know, relationship to where the owner is saying, I have 100 to 500 ships in my fleet, that I'm going to trust you with, to solve this issue for me. And therefore, I'm going to take a while to understand if you're the right partner. They're making a big investment. And so it's an element of trying to make sure that this was the right return on value. But I think that the benefit of that, at the end of the day, is that once you build these relationships, they're incredibly sticky, right? And so they chose one vendor for their sulfur scrubber, and then they went and deployed 120 systems with them over three years. That's the dynamic, and the reason why I say it's the best and the worst is that the Silicon Valley model, like that breaks that model, right? The Silicon Valley model does not like 12-, 16-month customer acquisition cycles. And so I think that that's the element in terms of when you think about fundraising and you think about investors, it's understanding that like, there's a certain type of capital, right, that's going to bring you through those components and knowing that this is how this is really going to play out at the end of the day.

Tim Poydenis: Yeah. No, it's interesting to hear. I mean, it has definitely got to be rewarding when you get something that sticks for sure. I can only imagine that it can be very frustrating, particularly if you go down the road for several months and then you sort of come up empty-handed. For the founders that are listening, if you had any sort of pro tips on best ways to really solidify those relationships that you're trying to build in the industry, what are some sort of tips that you could pass along to folks?

Chase Dwyer: I mean, I think the biggest two, I'd say – there's three, probably. The first is always, it's cliche, but it always comes back to team, and you have to build a team that is more or less just devoted to the mission in general. Because if that's the case, then it is quite remarkable of what can be accomplished as long as people are fully on board with what you're trying to do. So it comes with like, are you doing something that's impactful? Are the people you're working with trying to make the same impact? I think that's incredibly important, although that sounds cliche.

I think the second piece is that when it comes to building, speed and velocity are just so critical. And although we work in a slow-moving industry, we're always focused on what are the ways that we can make incremental progress and be iterative in this to be able to get an LOI (letter of intent), or a piece of our product, or an R&D (research and development) element faster and more iterative. And I think you're seeing this right now with this immersion of hard tech generally. But speed is so important because it allows you to iterate, it allows you to test things out and kind of like actively see, OK, is this going to work, and kind of go and iterate on it. So I think like a focus on speed and execution just has to be there with any hard tech company that you're building, and I think generally any company.

And then the last thing is that when it comes to investors, we now ask investors that we talk with, what's your track record investing in existing companies or other companies when the market has been in a worse place than it was when you originally invested, right, but you believe in the idea. Because a lot of investors say, you know – and I've heard this from peers, I've heard this myself – of, well, we totally believe in the idea, but it's hard to write checks when something isn't going exactly as planned, but it'll turn around in two years and it'll be better. And so I think generally it's finding the partners that are going to be there through the thick and thin, per se, as long as the company kind of continues to execute and, you know, we make it through. So I that that's the really big three components we'd say there is. Two of them are basically finding the right people, and the third is moving as quickly as possible and iterating.

Tim Poydenis: I think that's the life of a founder, is like knowing that nothing will ever go as planned. If you think it will, it's probably the wrong career path. In terms of career paths, I want to circle back a little bit to the beginning of the conversation now that we have some more information about you. Were you always an entrepreneur? Leaving school, going and doing banking? It just doesn't seem like you may have always wanted to be a founder – maybe you did. And I ask that just because I have a lot of folks that I talked to that are just like, yeah, you know what, I wish that I would have done X, Y or Z, but I became an attorney or started working at an investment bank instead. So what was your thought process and how you navigated that?

Chase Dwyer: Yeah, I mean, I liked elements of working in finance, working in renewable energy for other people. The challenge admittedly at the end of the day for me was that I was incredibly bad at having ideas and not having those ideas be seriously taken and executed on, I guess, is the way to put it. And so I essentially said, at some point I want to have the autonomy, basically, to say, we think that these are good things to do and we're going to go and execute on them, as long as people believe in us, essentially. And so I think I was maybe like a bad employee and, you know, taking my own risk as long as those support us. Which was kind of the catalyst for it, and honestly, I think that remains, probably, today.

But yeah, I mean, look, I went to Babson College, which is like, you know, the school focus is on entrepreneurship, and I actually didn't think that I was going to go into entrepreneurship coming out of it. But I think entrepreneurship has this, you know, addicting element to it, right? Like, you're in control of your own destiny, is the thing at the end of the day. I think, you know, it ultimately is up to you and the team that you build and all the people around you to make it happen. And you're not necessarily subject to, you know, what are the other 10,000 people in this organization do that affects what I'm doing on a daily basis. So I think that's what's most exciting about it. And generally, I think it's the place where you can make the most impact in whatever you care about, whatever impact means to you, because of that autonomy to do so.

Tim Poydenis: No, and I think that's something that, in the last point, I think that's something that I have enjoyed the most about working with you over the years, is like getting to be alongside, honestly, for the ride of a company that's trying to make a true impact. And I think it's nothing against other clients or other companies, but I think that when you have something that can have a very tangible impact on the lives of many, it's pretty cool, just to be honest. And to circle onto one of the things you mentioned about building the right team around you and for the speed that's needed in the industry, how do you go about that? How do you make sure that you have the right folks at the core level, whether it's folks on the employee team or in the boardroom or on the cap table?

Chase Dwyer: That's a good question. I think the first piece comes down to identifying first what is really required and what are the skill sets or the type of people that are needed. And I would say from there, once that's done, I would be remiss to say, you can only do it via references or via recruiters, etc., because we've hired people directly off LinkedIn who are absolute superstars. We've used recruiters and we've hired a lot of people who have been friends or…

Tim Poydenis: Yeah.

Chase Dwyer: I wouldn't prescribe anything along those lines. I would more just say that being really thoughtful about what is the fit and the role that really needs to be hired here? What different functionalities can they play? What might that role, what might that person be able to do in the future if the business or the functionality needs to change to ensure that they can kind of adapt? And then just keeping your eye out essentially, right, like for that right fit and the right person. And sometimes you don't have the luxury, you have to hire fast and figure it out, but that's typically where it's worked out for us. And I think we've been able to build a really great and motivated team.

Tim Poydenis: Now to ask the impossible question, particularly for an industry that is ever-changing at every drop of a hat, it seems like, and in seismic directions – like looking at your Magic 8 Ball, thinking down the road in three years to five years, what does success look like for Carbon Ridge in three years or five years?

Chase Dwyer: Well, I mean, I think the reality of what success looks like is you happen to be driving across a bridge close to a port or a terminal and you see a big white box on it on the back of a ship with a big Carbon Ridge logo. And somebody, my attorney or friend or somebody that sends a photo of it, and that means that you've hit a pretty good adoption curve. But I think more realistically, I think it's that we're now in the commercialization phase of our technology. We've proven it works on a ship, we've proven the technical component, we're now scaling it with different owners. And so really the next couple of years is building larger systems, showing exactly what the union economics look like and kind of proving out the overall model and then really moving into scale.

And I think the last thing I'd say also is that we say we only do maritime, that's our niche and our thing, but there's a lot of interesting synergistic elements about what we do in some other applications that are in maritime where we're focused on the technology and that will accelerate the adoption of our core technology and the validation of it as well. So there's lot of interesting things, I think, on the pipeline that we see here. But yeah, we're trying to, you know, get a Carbon Ridge system at every port near you.

Tim Poydenis: That's awesome. No better answer, you had me sold at seeing the white Carbon Ridge box on the ship, that'd be awesome. Well, I appreciate it, it's been a ton of fun for me. I know we're coming up on time here, but really, really appreciate you taking some time out of your otherwise very busy life and building a company. So I'll flip it back over to Patrick.

Patrick Driscoll: Yeah, that was incredible. I know if I now see one of those white boxes, I'll take a photo and I'll email them off to you, Chase, so I'll keep my eyes peeled. For listeners of the show, they know that I like to give a little bit of my key takeaways and there's a thousand here, so, I'm going to try my best to find the top five. The first one, which I think is interesting, is how you kind of took a look at the regulatory broader ecosystem and then identified market inefficiencies to find this is a prime opportunity. Really you actually met the market where it was. So it's kind of a pragmatic, innovative solution versus creating something and then trying to find the solution later. So doing a lot of research and getting into the weeds there, into the sector, made a ton of sense.

The second one, which is not news to anyone in deep tech, is the slow sales cycles and then sudden scale. I think you mentioned a phrase that's often talked about in VC, the hockey stick. So once you hit a point in, it sounds like this is the case in maritime, where there's enough adoption and people know who you are based on relationships and you've proven out the technology, then it's a sudden uptick in sales in the commercialization phase and you're going to become ubiquitous, ideally in the broader market, which is exciting. Using the hockey stick visual for this type of heavily regulated, slow-moving market makes a ton of sense.

Again, something that I like to tell founders all the time, not all capital is equal, especially in sectors that could be affected by things like political risk, which you kind of tapped into. So finding folks that really believe in the problem, understand the problem – you mentioned family offices, really aligned investors and kind of energy transition – that aren't just going to duck out whenever things become a little bit more scary or risky. They're in it for the long haul, they'll ride the wave, etc.

And then the final one that I'll mention, execution. So execution still matters. You talked a lot about building a mission-driven team that actually believes deeply in what you're building, prioritizes speed and iteration. So even though it's a slow-moving industry with perhaps a very slow sales cycle, you still need to be quick and nimble. You've got to be able to pivot and adapt, and you talked about getting things like LOIs and pilots and traction signals, even while things might be a little bit slow. And I did want to double-click on the team-building strategy, where you mentioned not only through the warm referrals, through your own little networks, but also, you never know, LinkedIn could have this amazing person that's going to come in and be an absolute rock star. So spread your net far and wide and I think you might get the right people if they really believe at the end of the day in the solution that you're providing. Those are my key takeaways.

And thanks again to Chase and to Tim. Special shoutout to Chase, you took time out of your very busy founder life to be here. This has been the most recent episode of "The Innovation Imperative." It was absolutely amazing to hear how Carbon Ridge is really tackling one of the toughest decarbonization challenges by meeting the market where it is and building practical and scalable solutions. If you've enjoyed the conversation, be sure to follow along for more discussions with founders and investors shaping the future of innovation, and we appreciate you listening. We'll see you next time, thanks.