Peter Yolles

Peter Yolles did not become a water investor by reading a market report. He spent roughly 30 years inside the sector first, as an operator and an entrepreneur, and the company that defines that chapter is WaterSmart Software, the water-use analytics business he founded in 2009 and grew to serve more than 15 million people across some 200 utilities before it was acquired by VertexOne in 2020. He is refreshingly honest about how that ended: in baseball terms, he calls it "a double, not a home run", meaningful to him as a founder because the product lives on, but never the fund-returning exit its investors had underwritten. That gap, between a good outcome and a venture-scale one, is the thing he built his next act to fix.

Peter Yolles founded Echo River Capital in 2021 as a solo general partner, which means he runs the fund himself rather than as part of a partnership. It is a small, deliberate vehicle, a roughly $4 million first fund that writes $50,000 initial checks, and it is built as a public benefit corporation and a certified B Corp, so the impact mandate is in the legal structure, not just the pitch deck. The thesis is what he calls the three Ds of water: digitize, decarbonize, and decentralize. Digitize is his favourite, and he frames it with a line worth keeping: water is analog, it is atoms not bits, and we are only "in the second inning" of converting those atoms into the data you need to actually manage a water system.

Peter Yolles will not make an investment unless he believes the company has at least a 10x outcome in it, and he wants one or two in every portfolio with a shot at 100x. He treats 10x as the conservative case, which is the whole point of the episode he came on to discuss. To get there he goes earlier than almost anyone else in water, into university spin-outs whose technology is validated in the lab but not yet selling, the stage most investors wait out. His first check went to Epic Cleantec, the onsite water-reuse company, and his portfolio runs through names like Aclarity (PFAS destruction), Crew Carbon (a spin-out from Yale, his own alma mater), and Uravu Labs (making water out of air). The discipline is brutal and simple: he grades every company A to F each quarter, reserves half his capital for follow-on, and only the top three to five winners ever see that second check.

Peter Yolles reads the water market as a place where the bottleneck is capital, not opportunity, "there are more great companies to invest in than there are investors willing to invest today", as he puts it, and he treats water investing as a team sport, co-investing alongside funds like Burnt Island, Emerald and Pure Terra rather than competing with them (the growing roster of water investors is something he is openly cheering on). He also keeps the human stakes in view: only about 80 families of chemicals are regulated in the US out of hundreds of thousands in use, and we still lack the epidemiology to link the PFAS, microplastics and pharmaceuticals showing up in our water to the health outcomes he suspects they drive. His sharpest line on the show was the one for the customers, not the investors:

“They should manage their water, or the water will manage them. We're in an era when unmanaged water risk will come back to haunt customers and investors, so it's better to understand your water risk and manage it yourself before you're swamped or flooded away.”

Peter Yolles is, in the end, the rare investor who has sat in the founder's chair and lost the home run, which is exactly why founders let him in early: he has already made the mistakes he is now helping them skip.