Why Nobody Wants to Become the Precedent

In a Brighter Future interview published in June 2024, Anthony Chow, co-founder of Agronomics, was asked whether he preferred first movers or better movers. He answered “Almost certainly not first movers.” Agronomics invests in cell-cultured meat and seafood, precision fermentation and the infrastructure that industry needs, and he gave an example from that field. “Perfect Day, which raised about $800 million to date over eight years. A direct competitor now that’s about six or seven years behind in technology will only need about $80 million and three years to achieve the same level of regulatory approvals and technology readiness as them.”

The gap between those two figures is what a precedent is worth to whoever follows. The first company spent the money and the years finding the path, and the follower walks it for about a tenth of the cost. The figures are his estimate, given in an interview, and they describe a path to regulatory approval and technology readiness, a step before any commercial plant. He also said that Agronomics, with its narrow focus, has backed some first movers. The arithmetic still shows what the first party pays for, and why everyone else has a reason to let somebody else pay it.

By the time a climate technology reaches its first commercial plant, much of the early uncertainty may have gone. The science is no longer hypothetical, the core technology has been demonstrated and a pilot has run, so engineers have operating data to set beside their models. Yet the first full plant can be the moment when commitment becomes hardest, because the evidence that matters most at commercial scale cannot exist until commercial scale exists. An investor can study the pilot, interrogate the engineering and stress-test the model, and none of that produces an operating history for a plant that has never run. A buyer can accept the technical evidence and still lack proof that industrial supply will arrive at the volume, quality and timing required. Some of that uncertainty can be estimated from comparable projects and some cannot. This essay is about what the absence of precedent does to the people being asked to move first.

Going first creates a different decision

Precedent changes how a decision can be defended. If ten comparable plants have already worked, the eleventh project enters a world in which performance, construction and commercial assumptions can be judged against actual history. If none exists, more of the judgement belongs to the person making the first commitment, and inside an institution that person has to answer for it. An investor who backs the first commercial plant may later have to explain why the committee accepted assumptions that had no close precedent. A buyer committing to future output may have to explain what happens if commissioning slips or supply misses specification. A corporate sponsor may have to justify accepting a premium before the supply chain has been proven. The first mover carries an exposure the second mover does not carry in quite the same way.

Brighter Future's investor archive records how investors describe that exposure. Ten of the sixteen published investor interviews record an answer to the question of first movers against better movers, all of them published between May and October 2024. Six preferred or built later and better movers (AgFunder, Übermorgen, Agronomics, Marble, Green Angel and Serra). Two said it depends on the market (ArcTern and Extantia), and two backed both (MaC and Lever). None preferred first movers. Myke Näf, a founding partner at Übermorgen Ventures, gave the cost in his Brighter Future interview. “I prefer later movers who can be more efficient, as first movers spend heavily developing the market and many startups are often too early rather than too late.” Nick Lyth, founder of Green Angel Ventures, added something about awareness in his interview. “First movers are often on treacherous ground, and equally, they often don't realise it.”

The question those investors answered asked which companies a fund backs, a neighbour of this essay's question about who commits first to a plant. Ten answers from 2024 record how those investors described their own funds, and none of it is a study. The Belief Gap report likewise treats the interaction between ambiguity and reputational exposure as a hypothesis that has not been tested as a causal model. The hypothesis is useful because it moves the question away from whether somebody is “brave enough” to go first and towards what, exactly, going first requires them to carry.

The buyer waits for the plant and the investor waits for the buyer

A buyer considering a new industrial material wants confidence that supply will exist. The plant required to create that supply needs capital, and the capital provider wants evidence that customers will buy the output. So the buyer waits for the plant and the investor waits for the buyer, and the system locks. Each party can have a rational reason to wait. The buyer lacks evidence of supply, the investor lacks evidence of demand, and neither needs to misunderstand the technology for the loop to persist. More proof about the underlying technology reaches diminishing returns at this point, because the open question concerns how the uncertainty is distributed, and that question stands however credible the science is.

Whether a first commitment can be defended depends on who carries the risk of delay, what happens if supply does not arrive, how much demand has to be committed before the plant can finance, what the buyer receives in return for moving before competitors, and which losses can be moved to a party better able to carry them. Those questions also explain why the answer is rarely a generic call for more de-risking. Risk can be transferred, shared, staged or left in place, and the useful work is to identify the particular uncertainty stopping the particular party.

A buyer contract does not finance the plant by itself

There is a tempting simplification in first-of-a-kind discussions, that securing a major buyer makes the financing problem manageable. A buyer commitment can establish demand before a plant exists, give investors a clearer revenue case and show that somebody outside the company is willing to act. The plant's own risks stay where they were. Demand can be contracted while construction risk, operating performance, capital structure and ramp-up economics remain unresolved, so the buyer and the plant remain two linked problems.

Renewcell AB shows that limit in public. The company had pre-sold capacity, and on 25 February 2024 it announced that it had filed for bankruptcy. The buyers were there and the company still failed, so contracted demand did not carry it through the risks on the plant's side of the loop. That keeps the lesson from shrinking to “get an offtake”.

Buyer commitments also need to be read for what they actually change. A commitment that depends on specifications, timing or financing may leave important parts of the commercial loop open, and What Is an Offtake Agreement and Why Does It Matter for FOAK Climate Tech? sets out how far each kind of agreement goes. Brighter Future labels every buyer commitment in a first-plant deck by what it obliges the buyer to do, and will not present interest as demand that finances a plant. An investor who discovers that a listed commitment was a letter of interest stops trusting the rest of the deck, and the first mover the company needed becomes one more party waiting.

Make the first decision defensible

The phrase “first mover” makes the person sound like a type of organisation. In practice somebody is making a specific decision under specific terms, and that leaves room for design. A first commitment can be made smaller, several buyers can move together, capital can arrive in stages and a guarantee can move one defined loss, and How to Present FOAK Risk Without Pretending the Risk Is Gone covers how to present each of them honestly. None of these structures rescues a project with weak economics or poor engineering. Their value lies in changing the consequences of moving before the full precedent exists.

Once one credible buyer moves, the next buyer has a different reference point. Once one commercial plant operates, the next investor has evidence the first investor never had. That is the gap in Chow's two figures, about $800 million and eight years for the company that found the path and about $80 million and three years for the one that follows it. The commercial problem is that somebody has to act before that information exists, and pays for the information everyone after them uses.

A strategy that depends on finding a heroic first mover is fragile. A stronger one works out why the first decision is currently difficult and changes the part of the exposure that can be changed, until the first commitment is one its maker could explain to a committee even if the second mover ends up with the cheaper path.

The risk and ambiguity behind this problem are covered in Why Are FOAK Climate Projects Hard to Finance?. The staging of a first commitment is the subject of I Believe You. I Cannot Sign This. This essay draws on The Belief Gap Report 2026, which Brighter Future applies through the Belief Gap Diagnosis.

Sources and further reading

• Renewcell files for bankruptcy, Renewcell AB, 25 February 2024
• Anthony Chow, Agronomics, investor interview
• Myke Näf, Übermorgen Ventures, investor interview
• Nick Lyth, Green Angel Ventures, investor interview
• What 16 Investor Interviews Teach Founders About the Decision After the Pitch
• How to Present FOAK Risk Without Pretending the Risk Is Gone
• What Is an Offtake Agreement and Why Does It Matter for FOAK Climate Tech?