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Cleantech investor and Sun Microsystems co-founder Vinod Khosla has already funneled tens of millions of dollars of his own money into dozens of cleantech startups — many of them biofuel firms — yet has had few, if any, big success stories to date. Many of his […]

Cleantech investor and Sun Microsystems co-founder Vinod Khosla has already funneled tens of millions of dollars of his own money into dozens of cleantech startups — many of them biofuel firms — yet has had few, if any, big success stories to date. Many of his investments have been lingering in the capital-needy growth stage of development, like cellulosic ethanol maker Coskata, which recently said it could only build its first commercial plant if it gets help from the U.S. government. But now, according to a report from Forbes, Khosla has finally turned to outside investors to create two new funds, which together are looking to close $1 billion, and which could largely invest in cleantech.

According to Forbes, Khosla plans to soon announce a $250 million fund for seed-stage startups and a $750 million fund, dubbed “KVIII,” for larger, more mature later-stage companies. It’s unclear who many of the investors are, but last Fall peHUB reported that California pension company CalPERS was interested in investing in these new funds, so likely CalPERS will be part of this investing group.

So will Khosla just be using these hundreds of millions of dollars to prop up his previous profile of aging cleantech companies that need a lot of capital? Perhaps, but according to Forbes, Khosla has set up an unusual way to help protect investors against risk in the form of a conflicts committee that will review investments. Forbes suggests that Khosla likely set this up to allay investors’ fears that there would be too many follow-on deals from the later stage $750 million fund.

Still, even now that Khosla is trying to play the traditional VC, he’s still putting his money where his mouth is: he’s putting in $150 million of his own dollars into the new funds.

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By Katie Fehrenbacher

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  1. [...] this somehow: Vinod Khosla is apparently planning two new clean-tech funds worth $1 billion, at [...]

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  2. Its painful to watch, at least its not my money!

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  3. [...] Reports emerged last month that Vinod Khosla, the high-profile green venture capitalist and Sun Microsystems co-founder, was finally turning to outside investors to create two new funds that together would raise $1 billion to primarily back cleantech startups. Hard evidence has now surfaced about one of those funds in a June document (hat tip to peHUB) from CalPERS. The California pension fund has committed to invest $60 million into what it describes as a fund that will focus on early-stage clean technology opportunities. The new fund, which according to the doc is now closed at $250 million, will also put some 25 percent toward information technology-focused startups. [...]

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  4. [...] Reports emerged last month that Vinod Khosla, the high-profile green venture capitalist and Sun Microsystems co-founder, was finally turning to outside investors to create two new funds that together would raise $1 billion to primarily back cleantech startups. Hard evidence has now surfaced about one of those funds in a June document (hat tip to peHUB) from CalPERS. The California pension fund has committed to invest $60 million into what it describes as a fund that will focus on early-stage clean technology opportunities. The new fund, which according to the doc is now closed at $250 million, will also put some 25 percent toward information technology-focused startups. [...]

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  5. [...] Forbes and others were reporting earlier this year is now official: This morning famed cleantech investor Vinod Khosla has officially raised $1 [...]

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  6. [...] According to a Forbes report from July, Khosla is doing something unusual with Fund III: He’s set up a way to help protect investors against risk in the form of a conflicts committee that will review investments. Forbes suggested that Khosla likely set this up to allay investors’ fears that there would be too many follow-on deals from his previous investments in the later-stage fund. [...]

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