Fundraising for Industrial Transformation: A Q&A with David Tearse, CEO of Karman Industries

Forge Series highlights the founders and experts driving deep tech innovation in Southern California. Hosted by Stifel Bank Managing Director Al Guerrero, these conversations explore industry trends, investment insights, and the challenges of building transformative companies. The series sets the stage for the annual Forge Conference, a gathering of top deep tech founders, investors, and executives.

Karman Industries is on a mission to redefine industrial efficiency, combining cutting-edge engineering with a sustainable vision for the future. As they push toward their next milestones, strategic fundraising plays a crucial role in accelerating their growth. 

By securing the right investors and capital, Karman is demonstrating how deep tech startups can scale rapidly and make a lasting impact on both industry and the environment. 

Stifel Bank Managing Director Al Guerrero sat down with David Tearse to discuss Karman’s journey, the role of fundraising in scaling deep tech, and the company’s vision for the future. This interview has been edited for length and clarity.

Q: What problem is Karman Industries solving?

David Tearse: Despite the importance of heat in industrial manufacturing, the underlying technology hasn’t changed in over 150 years. Most industrial processes rely on outdated, inefficient natural gas boilers, which not only waste energy but also produce high emissions. 

We saw an opportunity to bring cutting-edge advancements from aerospace, EV power electronics, and advanced manufacturing to dramatically improve efficiency in industrial heat systems. 

Our first product is a next-generation electric heat pump that recycles waste heat at efficiency levels of 300% to over 1,000%. Our systems can significantly reduce annual energy costs for our customers at a fraction of the cost of existing solutions for industries like food and beverage, chemical processing, ethanol, pulp and paper, and textiles. 

Q: What has been the biggest challenge in getting investors excited about this opportunity?

David Tearse: One of the biggest hurdles was educating investors on the sheer scale of the opportunity. Industrial heat isn’t something most people think about daily, but it represents over 20% of global greenhouse gas emissions—twice the emissions of all the cars on the road and eight times that of all planes in the sky. There are about 700,000 boilers globally that could be replaced by a heat pump. 

Once investors understood that we’re targeting a massive, $600 billion annual energy cost market with a transformative technology, they quickly saw the potential.

Q: How did you approach fundraising? Any advice for early-stage founders?

David Tearse: Relationships are everything. You have to start building relationships with investors way before you actually start fundraising. If you come in cold, it’s a larger hill to climb. Investors want to see you making progress time and time again. If they’re meeting you for the first time when you’re already fundraising, they have no context for how fast you move or how well you execute.

Q: Any advice for founders looking to fundraise?

David Tearse: Storytelling is often an afterthought, and that’s a mistake. 

Steve Jobs was famous for constantly pitching his ideas to friends, family, and colleagues, refining and polishing his message over time. By the time he stepped onto a keynote stage, he didn’t need a script—his pitch was second nature.

That’s the mindset founders should adopt when preparing to raise capital. Pitch, pitch, pitch. Constantly be refining your messaging and seeing what resonates with people and what doesn’t. When it’s time to fundraise, you’ll have an extremely compelling story that excites investors and gets them emotionally invested in your mission. 

Your pitch should never be static. Then investors look at you as static, which is not what you want. You want them to see that you’re constantly adapting to new information as markets shift and opportunities evolve. 

Q: What’s your perspective on the future of hard tech and climate-focused startups?

David Tearse: Investors have shifted their thinking. While capital-intensive companies were once seen as risky, they now recognize that big problems require real innovation—and capital. The most valuable companies in the world all build hardware—Apple, Tesla, SpaceX. Deep-tech startups that solve fundamental challenges and scale effectively will be the industrial giants of the next generation. 

Q: Why did you choose to build Karman in Southern California?

David Tearse: The talent pool here for hardware engineering is unmatched. We wanted to hire people who would have started their own companies if they hadn’t joined us. Southern California has an incredible density of aerospace and advanced manufacturing talent from companies like SpaceX, Rocket Lab, and Rivian. 

We strategically based ourselves in Long Beach to make it easy to recruit top talent from across the entire Southern California ecosystem without forcing people to relocate. That has helped us build an elite team at record speed. 

Q: What’s next for Karman Industries?

David Tearse: Right now, we’re laser-focused on our first product demonstration, scheduled for May—just nine months after launching the company. From there, we’ll take an iterative approach to development, refining the technology and preparing for commercial deliveries in early 2026. Given the size of our opportunity, we’re looking at accelerating hiring and development.