Comments on: The Problem With Cleantech VC Investing http://gigaom.com/cleantech/the-problem-with-cleantech-vc-investing/ Wed, 30 May 2012 00:56:44 +0000 hourly 1 http://wordpress.com/ By: Greentech Media: Cleantech Investing » Blog Archive » The revolution will not be publicized http://gigaom.com/cleantech/the-problem-with-cleantech-vc-investing/#comment-18225 Tue, 16 Dec 2008 03:59:38 +0000 http://earth2tech.com/?p=17574#comment-18225 [...] Michael Kanellos at GreenTech Media (I’ll discuss that column a bit more in another post) and Katie Fehrenbacher at Earth2Tech, but otherwise financial reporters were too busy throwing shoes at ponzi-scheme hedge fund [...]

]]> By: Max http://gigaom.com/cleantech/the-problem-with-cleantech-vc-investing/#comment-18224 Fri, 12 Dec 2008 19:11:23 +0000 http://earth2tech.com/?p=17574#comment-18224 This is a bit of a strange post. The arguments themselves seem to reconcile the behavior.
- There’s no prescribed development cycle for clean-tech companies. If 2003 is the starting point for VC investments (after the bubble aftermath) then we’re only in year #5. Who says it takes 5 years to get to an exit in solar, wind, or biofuels? Med Devices can take 10 years. Consumer internet can be 2-3. Clean-tech may be in the middle.
- It makes sense, then, that VCs would invest in late-stage companies if their funds are already in year 5 (they cash out after 10 years). It’s the closest path to an exit relative to investing early stage.
- The reality may be that the Venture model isn’t well suited for these scale companies. The capital required to implement these three industries are significantly higher to generate returns. New solar companies need to build manufacturing facilities; Next gen biofuels companies have extremely very high capital costs relative to the volume of product they produce (and are still small with respect to the overall fuel market). VCs, in their current format, may not be the right investment method to develop these technologies to scale.
- So what if there are few failures. We may not have waited long enough for them to reach their full commercialization cycle. That’s okay .

None of this seems like there’s any dire situation or really any cause for concern.

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