How to Fund Reuse Systems? Private Funding Options
While the case for reuse has been made, funding for reuse infrastructure remains the biggest gap to transitioning the U.S. to a reuse economy. Reuse infrastructure refers to wash facilities (i.e., the buildings) and the equipment (vehicles, dishwashing machines, etc.) that make the collection, wash, and redistribution of reusable packaging possible. Other primary costs in creating reuse infrastructure and logistics are upfits to buildings to make them permit-compliant with state food code, as well as the training and wages for staff. Without the funds for the upfront capital expenditure, reuse cannot compete with the outdated but heavily subsidized trash and recycling industries.
What’s a reuse startup to do? One of Upstream’s core strategies is to grow and support the burgeoning reuse industry, and to that end we have been considering all of the potential ways in which it can be funded. The goal is to identify best bets so we can concentrate our efforts to scale infrastructure.
Our research has revealed the following private funding opportunities. Be sure to see our previous article on myriad public funding options.
Option One: Private Grants
Private grant opportunities are generally only available for 501C3 nonprofit organizations or volunteer groups with fiscal sponsors. Such funds can still provide a viable path to scaling reuse, however, as they can go toward NGOs in the reuse movement who are advocating for supportive policy and public infrastructure buildout. Community-based reuse groups and coalitions across the US & Canada are eligible for mini-grants from Upstream, and they also can tap into the private foundation opportunities listed in our Reuse Grant Tracker.
Option Two: Impact Investment
Investment in reuse unlocks the market's potential, establishing the infrastructure that creates a flywheel effect for sustainable growth without requiring proportional ongoing investment. Large contracts with venues like stadiums and institutions like schools seed the reuse ecosystem. For example, catalytic capital in the amount of $40M would allow for 36 sports and entertainment venues to shift to reuse, lending exponential impact of reuse infrastructure in 36 metro areas that could then service schools, restaurants, and shops. The more contracts a reuse service provider can secure in one metro area, the faster the ROI for the investor.
Upstream is cultivating an investor network focused on reuse infrastructure, connecting them to investment-ready projects, and providing due diligence tools they need. We are working to challenge impact investors to consider true transformation in their investment portfolios. Even conventional portfolios should include reuse companies as a hedge against resource constraints and climate risks — if only to protect against the predictable future of rising material costs and tightening environmental regulations. It's risk management, not just do-good investing.
Option Three: Incubators and Accelerator Programs and Prizes
A startup incubator helps entrepreneurs develop and refine high-potential startup ideas. Incubators often operate locally and provide a host of resources—such as physical space to access as needed—over a span of one to five years. Startup accelerators are short, intensive programs that provide education, resources, and mentorship to early- or mid-stage founders. Often cohort-based, accelerators are more structured than incubators and outline specific tracks to turn a startup into a scalable business. Some offer multiple programs targeted at different industries or venture stages. They also may offer funding in return for a stake in the company and/or access to an alumni network and investor connections.
Sustainability, economic development, or climate change based incubators and accelerators could be good fits for reuse service entrepreneurs. This list of 90 Technology Accelerators for Sustainability, Green IT and Climate Tech Startups is a great place to start. Also check out Episode 131 of The Indisposable Podcast: What Sticks is What Works, with Tim Wolters, CEO of Crowdsolve, a startup platform that combines technology and human-to-human collaboration to advance innovative climate solutions.
Option Four: Equity Crowdfunding
Equity crowdfunding enables broad groups of investors to fund startup companies and small businesses in return for equity — e.g., investors give money to a business and receive ownership of a small piece of that business. If the business succeeds, then its value goes up, as well as the value of a share in that business—and the converse is also true. Equity crowdfunding can take a lot of legwork, but it also allows a reuse entrepreneur to set their own terms and interest rates.
Option Five: Market Development
Upstream is also conducting market development and facilitating connections to help reuse service providers gain wash contracts. This includes creating principled, evidence-based model RFPs for reuse services; identifying geographic hotspots — like FIFA World Cup cities and Los Angeles for the 2028 Olympics; and identifying reuse-ready sectors like sports & entertainment venues, school districts, and national parks. We have also developed a wash hub map to indicate that reuse is a burgeoning industry and to show where reuse has potential to scale today.
By leveraging and further developing all of these mechanisms in tandem, the seemingly insurmountable barrier of funding starts to seem less like a dead end and more like an opportunity for innovation and education. Ultimately, creative capital for reuse will start to level the playing field against the heavily subsidized trash and recycling industries, supporting the growth of a truly robust and enduring economy.
