What's Wrong with Cleantech VC

I came across this post on GreenVC.org from Rob Day an investment principal at @Ventures about what's wrong with cleantech venture capital right now. The presentation is included below, but Day summarizes the trends he sees as follows:

The shift to larger and larger funds.
The related shift to later-stage investing.
The related shift into capital-intensive subsectors and business models within cleantech.
The mismatch of investment concentration with the geographic dispersion of cleantech innovations and innovators.
The concentration of venture capital investments into just a few subsectors, while the lion’s share of subsectors receive much less attention (much less dollars) from investors.

From flipping through the presentation itself, a few other things stuck out to me (in my own terms):

VC's don't know what businesses will work and which don't work (i.e. provide a good return). There just haven't been enough exits yet.
Exit have been trending towards M&A's rather than IPO's. This is the case across the board in VC.
Although cleantech has many different segments (e.g. transportation, water, energy storage, etc.) across many different markets (e.g. personal, residential, industrial, government, etc.), yet VC's have been putting all their money into only a few subsectors.

I also came across an interview with Steve Jurvetson from Draper Fisher Jurvetson about DFJ's focus on cleantech these days. Jurvetson seems to agree that certain areas are over-funded right now, like some biofuels for example. He also agrees to stay away from investments that are overly capital intensive. Day was arguing that venture firms should focus on finding investments that fit the existing VC model rather than redefining the VC model to fit with the higher capital requirements of some cleantech ventures.

What's Wrong With Cleantech VC

View SlideShare presentation or Upload your own. (tags: greentech alternative)

Comments

Biofuels May Hinder Anitglobal-Warming Efforts

Read an interesting article a couple weeks back in the WSJ on how biofuels may actually increase carbon emissions in the medium to long-term. Apprently the shifts in land-use necessary to support the production of bio-materials like soybeans, corn, or palm could in fact release more carbon emissions. The time it takes to get carbon-neutral on some of these projects is pretty crazy - 319 years for soybean biodiesel from Brazil (assuming you're clearing rainforest), 93 years for corn ethanol from the U.S. (assuming you're clearing grasslands), 86 years for palm biodiesel from Indonesia (assuming you're clearing rainforest). I suppose biofuels really aren't meant to reduce carbon emissions, but just crazy that they potentially exacerbate the problem so much.

Nine Prescriptions for Building the Duke Entrepreneurial Community

I think Duke can have one of the strongest entrepreneurial communities in the world. Are we there yet? Well, not yet. But there's a tremendous amount of momentum that I saw build in just the past two years while I was getting my MBA at Duke. While leading Duke's 10th annual business plan competition, the Duke Start-Up Challenge (DSC) , last year, I witnessed a near doubling of participation on campus in just a single year. The interest on the ground was clearly there and building rapidly. But now that I'm an alum, I'm looking back and wondering ... how do we rev-up the Duke entrepreneurial community even more? I read a great article by Daniel Isenberg, a professor of management at Babson, called " How to Start an Entrepreneurial Revolution " in the June edition of the Harvard Business Review. Isenberg outlines nine prescriptions for governments that want to create entrepreneurship ecosystems in their countries. Although he was focused on governments an...

Bloomberg for President?

We can only hope. I read an article in the WSJ about how business people across the country, from entrepreneurs to bankers, are all hoping for Bloomberg to run. The economy thus far seems to have taken an unusual backseat in this years election but seems to be emerging as an important issue. An interesting excerpt: As the economy has emerged as a dominant issue in the 2008 campaign, candidates have struck populist notes, from Republican Mike Huckabee's boast that he is not a "wholly owned subsidiary of Wall Street" to Democrat Barack Obama's visit to Wall Street to chastise finance executives for failing to protect the middle class. I can see the approach these guys are taking and I'm sure they have really smart campaign strategists. But I really wonder if this type of message of polarizing the "working man" vs. "big business" really resonates with voters anymore? Is the middle-class really that disgruntled with big business and income dispa...

Power Pal

Search This Blog