David Girouard, founder of Upstart.com

The company also gets two new board members, Bob Kerrey, the former senator from Nebraska and former president of the New School, and Jessica Jackley, co-founder of Kiva, which helps organizations obtain microfinancing.

David Girouard, the former president of Google Enterprise, founded Upstart last year because he thought that the difference between a smart grad starting his or her own company or not often boils down to relatively small amount of money. “At Google, we hired hundreds of great young people who couldn’t put together $30,000 to buy a car if their life depended on it without going into credit card debt,” he told me last year.

Goal: Helping  students stick with school, then launch

Upstart’s goal is to match those students with backers/mentors — mostly tech industry veterans like Andy Palmer, co-founder of Vertica. The Upstart entrepreneurs agree to give up  a set percentage of future earnings — capped at 7 percent — in return for the backer or backers’ investment.

“An upstart can have as few as 3 or up to 30 backers,” Girouard said in an interview. “How much they can raise can vary to over $100,000 but the sweet spot is $30,000 to $40,000.”

In the past year, more than 80 grads have been funded and 135 backers signed on. And Upstart, which started out focusing on select universities, has now opened up the program to all comers. This is not a charity: Upstart gets 3 percent of the patron’s initial contribution. If the effort pans out and the entrepreneur repays the patron, it also collects a 0.5 percent service fee, down from 1.5 percent last year.

Kicking the can down the road?

Upstart, based in Palo Alto, Calif., stands in contrast to the Thiel Fellowship, which pays smart college kids to drop out and pursue their business objectives rather than staying in school. Girouard has said repeatedly that degrees have value and hopes his program will encourage students to stick with their studies until completion..

Still, Upstart came under some fire — including from some GigaOM commenters — who said it just encourages students to incur more debt, “kicking the can down the road,” when they should just dig in and self-fund or take their first jobs to make money before setting out on their own.

Girouard maintains it’s a creative and low-risk way for these would-be entrepreneurs to get funding that could mean the difference between founding a startup or not.

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The factory will be the first in the world building EcoMotor’s “opoc,” opposed piston, opposed cylinder engine, at a commercial scale. When it starts production in 2014, the factory will aim to produce 150,000 engines per year. There’s also an adjacent site that could expand production to 400,000 engines per year down the road.

Strategic deals with huge Chinese companies are becoming a valuable way for Valley cleantech startups to move into commercial production and actually have a chance at succeeding. In particular Khosla Ventures has been adept as of late at helping its companies navigate deals in China.

Chinese parts company Wanxiang invested $420 million into GreatPoint Energy – a company based in Cambridge, Mass. that converts coal into cleaner-burning natural gas — in order to commercialize GreatPoint’s technology in China. LanzaTech, which turns gases emitted from industrial processes into biofuels and biochemicals, is working with China’s largest steel producer, Baosteel, as well as Chinese coal producer Yankuang Group. Khosla Ventures has invested in both of these firms.

By partnering with a giant like Zhongding, EcoMotors doesn’t have to raise and spend a lot of money on infrastructure. In return, Zhongding will sell the engines domestically in China — these particular engines will be powerful ones used for generators, off-road vehicles and commercial vehicles. Chung called the strategy “cleantech done right.”

EcoMotors’ engine can be 20 to 50 percent more efficient, 20 to 25 percent lower in cost to buy, and half the size and half the weight of a traditional engine. For car manufacturers the capital savings are even greater — at 30 to 40 percent — when using EcoMotors engine to build an efficient vehicle. When placed in a passenger light weight vehicle, the engine could deliver a 100 MPG, 5-passener, car.

The Chinese car market, as well as the engine market, are the largest and fastest growing in the world. And the Chinese government has set very aggressive goals to reduce the country’s air pollution and carbon emissions.

EcoMotors is a particularly unusual investment for a venture capital firm because the internal combustion hasn’t seen much innovation in decades. But the global trends of needing this innovation are clear: more and more countries are pushing for lowered car emissions, air pollution is a massive problem throughout developing countries, and the cars that will catch on in the price conscious developing markets will be cars that use fuel efficiently and thus save their customers money. Other startups working on efficient engines include Pinnacle Engines, Achates Power, Grail Engine Technologies, and Transonic Combustion.

Updated at 3:00PM PST, April 9, with mention of the deal with Baosteel, China’s largest steel producer.

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But the story of the year and half-old venture capital-backed Misfit isn’t just a tale about a startup building a coveted Apple-inspired gadget. Though it certainly is that — the company was founded on the day that Steve Jobs died, “Misfit” is a tribute to Jobs and Apple’s ads to think differently, and one of the company’s co-founders is Apple’s former CEO John Sculley (who was instrumental in pushing out Jobs in the 80′s).

Misfit has emerged at the intersection of a few key trends in 2013 that are shaping wearable computing, data, and design. These trends include the emergence of next-generation wearables that have more mainstream appeal, the development of the lean hardware movement that is using crowd funding to experiment, the collection of data that uses narrative and emotion to create an impact, and, most importantly, the introduction of a new type of user interface, which Misfit CEO Sonny Vu has coined as “the glanceable UI.”

Next-gen wearables

Accelerometers and sensors have been around for years. One of the pioneers of the space, Fitbit (see disclosure), is already a five-year-old company. Back in 2008, it was novel to just have a device that could track your movements, count your steps and calories, and sync with your laptop or smart phone.

But in 2013 the hardware for wearable devices has become a commodity, and the success of companies creating wearable computing will depend on the design of the device, the functionality of the software, and how the software and the gadget work together to provide value to the user’s life.

Misfit is part of this second wave of design-centric wearable computing. “We’re very focused on the packaging,” Vu told me with a smile during an interview last week at Misfit’s modest office in Daly City, California. Misfit was founded by Vu, Sculley, and Sridhar Iyengar, who was a co-founder with Vu at his former company AgaMatrix. AgaMatrix created the first FDA-approved glucose meter to work with the iPhone, giving Vu and Iyengar years of rare experience building wearable devices.

While crowd-funding helped fund Misfit’s first run of the Shine, Misfit is actually backed by some of the most well-known investors in the Valley, including Founders Fund and Khosla Ventures. Along with its team in Daly City, it has a group of software developers in Vietnam, and makes its gadget in Japan and South Korea.

Think differently

For Misfit, design innovation has been fundamental to creating its hardware. The company doesn’t use words like sensors, or accelerometers on its website, and is trying to look far beyond the niche, early-adopter “quantified self” community.

The first aspect of its design innovation is in the materials. While most wearables on the market are made of rubber or plastic, Misfit’s Shine is almost completely made out of metal — a first in the industry. The metal is part of what makes the device so beautiful and also gives the feeling of value to the user. The metal also makes it very durable; the Shine is fully water proof.

There are reasons why competitors haven’t used metal for pint-sized wearables. The Shine might look awesome, but it takes four different factories just to make the various pieces of the shell and the metal also has created some usability restrictions. The Shine has to be placed directly onto (actually touching) the face of the mobile phone to sync it; the wireless signals wouldn’t escape the metal casing without that.

“The next time I think of doing an entirely metal product, someone shoot me,” laughed Vu.

Steve Jobs also famously went to great lengths for hardware design, like the iPhone’s unscratchable glass screen, and the handle on top of the original iMac.

Another unusual design element that Misfit deemed necessary is that the Shine isn’t chargeable. It’s got a coin battery, which lasts 4 to 6 months before it needs to be replaced. Pretty much every other wearable on the market is chargeable and requires weekly, or even daily, charging. “We had an almost religious belief that wearables should not be charged. You don’t charge the buttons on your jacket, or the backpack on your back,” Vu said.

The decision to forgo charging also created usability restrictions, namely power management. The Shine needed bright LED lights on its display, the LEDs needed to shine through the metal casing, and the battery had to run the processor and keep time for up to 6 months. Pairing it with a wireless charging dock would have been far easier and would have enabled far more functionality.

A third counterintuitive design choice is that the Shine is a circle, but uses an inverted edge to connect with various accessories — there’s a sports and leather wristband accessory, a magnet clip for clothing, and a necklace that hangs it from your neck. Vu said that quintessential form choice will make the Shine more accessible for people’s various needs.

For example, many women won’t put anything on their wrist, which means wrist-only devices like the FuelBand or Jawbone’s UP are neglecting a good portion of potential users. From a business perspective, accessories can also add substantially to margins, which, for Misfit, could be tight given the Shine is a higher-end device made completely of metal that is trying to hit the price point of the Fitbit.

These types of design decisions have created a device that is substantially different from Misfit’s larger and older competitors. Vu said before founding the company and designing the Shine, the team read every single negative review of the Fitbit, the Nike Fuelband, and the Jawbone products.

Glanceable UI

Beyond the hardware, Misfit is also innovating around the UI and how the user experiences feedback from the Shine. The design team made the decision to remove a digital screen interface entirely and replace it with a halo of tiny LED lights. They also removed an on/off button. Part of the reason they made these changes was because of the power management issue — there’s no way the device could power a brightly-lit screen and not be a chargeable device.

But the move was also a decision to head in the direction of what Vu called a “glanceable UI.” Designers have for years been focused on UIs for the laptop and cell phone screens, but are more recently just beginning to create interfaces for the very quick glance that is needed for a wearable device.

The Shine takes what the Nike Fuelband started with its colored-LED display and basically pares it down. Shine users can check to see how complete the circle of lights is around the gizmo to determine if they’re meeting their daily fitness goal. By briefly touching the center of the Shine, the lights can quickly configure into a clock to tell the time, meaning the Shine is also a smart watch, too.

If you hear wearable designers and developers talk about user experience, they’ll commonly talk about truncating content. Google’s Glass advocate Timothy Jordan explained recently at SXSW that an app built for Glass, like the New York Times app, has to show enough of a snippet of information to be conveyed in just a look. The New York Times Glass app shows headlines and images, but not full articles.

Likewise, health and body information on a wearable device like the Shine should be able to be conveyed in a second or two. The cell phone app that syncs with the Shine houses the rest of the functionality.

A glanceable UI is about creating a second’s worth of meaning out of important and impactful data. Whether that’s a moment to convey how well you’re doing toward your daily fitness goal or a single blinking light to encourage more movement. As Om wrote recently, as data becomes the world’s currency, data without emotion, empathy or narrative is meaningless. Wearable gadgets can track as much data as they want, but if the user isn’t exposed to the data in a way that impacts their lives, and in a time frame that they can work with, then the device has failed.

Getting to market

Some of Misfit’s design decisions were controversial even within the company, which is why Misfit decided to test out to see if customers would be interested in a metal, non-rechargeable, no-screen, wearable gadget. Turns out, at least on Indiegogo, they are. The company raised over $800,000 from almost 8,000 funders who wanted to buy the Shine early.

Crowd-funding was a way for Misfit to experiment. It’s actually gotten millions from traditional Valley investors to launch its products more commercially. But crowd-funding is becoming a common way for the so-called lean hardware movement to operate. Hardware innovation was front and center at SXSW this year.

Misfit is shipping its first 5,000 Shines to customers in early June and another 7,000 or 8,000 in the second half of June. Shortly after that the Shine will go on sale at retail outlets for around the same price point as the Fitbit, which is around $99.

The Shine is only Misfit’s first product, which Vu calls Product Zero. They’re also working on a device called Mars, or Project One, which will be launched early next year. On the topic of Mars, Vu would only say that it would be a wearable but one that has a longer battery, makes more use of data, and has a different material and different shape.

While Misfit is just a young company, and has yet to deliver its gadgets to its first customers, it’s operating at that the intersection of some of the Valley’s most interesting trends, including the power of design, the next-generation of more mainstream wearables, the importance of impactful data, and a coming era that will feature the glanceable UI.

I look forward to hearing about the first Shine users’ experiences this Summer. In November we’ll be talking more about these issues of design, connectedness and experience at our third annual RoadMap event in San Francisco. Tickets will go on sale this summer, but you can sign up to be one of the first to access tickets.

Disclosure: Fitbit is backed by True Ventures, a venture capital firm that is an investor in the parent company of GigaOM. Om Malik, founder of GigaOM, is also a venture partner at True.

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Rabois recently resigned from Square, where he was serving as COO in January after an employee accused him of sexual harassment. Square accepted his resignation but has so far backed Rabois and he joined Khosla Ventures in February. Vinod Khosla said in an interview at the time that he was consistently impressed with Rabois’ business expertise, and said he heard from entrepreneurs that Rabois was one of the most sought-after advisers in Silicon Valley.

During the Founder’s Showcase event on the future of investing on Wednesday, Rabois didn’t break a lot of new ground, but here were five things he told us:

His “Spidey Sense” tells him the Series A Crunch is probably real

Various people have written about the Series A crunch, and Rabois said he thinks it’s probably not just hyperbole. It is actually getting harder for companies to move from raising a seed round to raising a Series A round, especially with crowdfunding platforms like Kickstarter making it easier to get in the game.

“My spidey sense is that there is a real change,” he said.

Half the battle for startups lies with people

“Capital is one of the resources you need to build a real business, but people are the other. And people are incredibly scarce,” he said.

Party rounds are not that effective

“When you do that, no one really cares. They won’t wake up in the morning and think about your company. Most of the people will return your call and try to be helpful, but it’s very different having a partner and having an investor,” Rabois said of party rounds, which are investment rounds involving a large number of people where no one has a substantially larger stake.

When dealing with the press, be honest

Having worked on communications teams for a variety of startups, Rabois said honesty is the best policy and it’s not worth taking short-term gains if you think you’ll be around for a while. This gets harder if a reporter hears that you raised funding that you’re not ready to announce, but he said he’s always tried to give more than a “no comment.”

Being a good VC is an art, not a science

In response to questions about metrics he looks for or benchmarks he wants to see in companies he invests in, Rabois said metrics are important to an extent, but anyone can look at numbers and make a call. Being a successful venture capitalist is about the art of recognizing unique founders or market opportunities.

“It’s pretty much a commodity skill to look at numbers. It’s not a real skill,” he joked. “Investment bankers can look at metrics.”

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So whatever happened to that IPO? Last week, Mascoma quietly withdrew its IPO plans. The company cited “market conditions,” for the move, though the macro IPO market conditions seem a little better in 2013 than 2012. Already this year smart grid company Silver Spring Networks went public, and late last year solar installer SolarCity made it out.

Mascoma currently makes a next-generation yeast that it sells to corn ethanol makers to help them cut the costs of making corn ethanol. That’s what made up the other 14 percent of its revenues (the part that wasn’t grants) at the time of its IPO-filing. But Mascoma’s real aim is to use its technology to make cellulosic ethanol — a next-gen type of ethanol that uses plant waste (not corn) — and the company wanted to do that using wood waste in a factory in Michigan. Many companies have tried to make cellulosic ethanol at scale in recent years and failed.

Before pulling its IPO, Mascoma raised two rounds of a few millions of dollars in debt over the past six months. That’s not the typical behavior of a company on the upswing getting ready to go public.

And over the past year and a half, as Mascoma amended its S-1 every once in awhile, its finances didn’t improve. The latest revenue numbers from March 2012 — a year ago — said that government grants and awards then constituted 93 percent of its revenue while sales of its equipment and services made up 6 percent of revenue. So the percentage of grants disturbingly actually rose over the 6 months from its first filing, rather than dropped, and its percentage of sales from real products fell.

Mascoma over the years has raised a lot of money from both venture capitalists, strategic corporations and public funds. At least over $100 million in private capital from companies like Khosla Ventures, SunOpta, GM, Marathon Oil, Khosla Ventures, Flagship Ventures, Atlas Venture, General Catalyst Partners, Kleiner Perkins Caufield & Byers, Vantage Point Venture Partners, and Pinnacle Ventures. The company was founded in 2005 from research from a Dartmouth Professor, Lee Rybeck Lynd.

Public funds have also been awarded and sometimes allocated for its projects. The Department of Energy awarded it $80 million to help it build Kinross, though its unclear if Mascoma actually drew down on those funds. The state of Michigan also offered Mascoma a $20 million grant to build the factory in Michigan.

At some point in 2012, Mascoma had been hoping to start construction on its factory in Kinross, Michigan that could eventually produce 20 million gallons per year of cellulosic ethanol. The company had wanted that to happen before the end of 2012, with operations starting in 2014.

An article in Michigan Capital Confidential from the summer of 2012 quotes a financing partner of Mascoma’s, Frontier’s VP of Operations, Ken Nielsen, who said that the company expects to ”start construction by the end of the year [2012].” Mascoma managed to secure (in December 2011) an agreement with Valero to help it build that factory, but it’s unclear how much Valero was willing to put up to finance this project.

According to the Michigan Capital Confidential the Kinross project had as of the summer of 2012 only created three jobs (it was originally supposed to create 70) and “received strong criticism from environmental and fiscal groups across the political spectrum.”

As of March 2013, it’s unclear if Mascoma ever broke ground on that facility, or if it hasn’t when it will. I’ve reached out to the company and am waiting to hear back. You can bet if they did start construction, they’d have sent out a press release on it across the internets. Instead, vaguely, Mascoma’s website still says the Kinross facility is “planned” and anticipated to go under construction in 3 to 6 months (the same time line it used a year ago).

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The firm’s previous fund was for $127 million, and the Westly Group has been working on raising this current fund for awhile (since mid 2011). Originally the fund was targeted at $175 million. The Westly Group is a little different from other investment firms in that it says its principals have invested more than $50 million of their own money into the company’s funds over the years.

The firm has been one of the more successful cleantech investors out there. Three of The Westly Group’s portfolio companies have gone public on the NASDAQ, including electric car company Tesla, biofuel company Amyris, and Chinese recycling company China Recycling Energy Corporation (CREG). The firm says on its website that “at the end of 2010, we had returned nearly all of invested capital to our limited partners.”

Not all of the Westly Group’s startups have done well, of course. Solar company Amonix has been struggling. Waste-to-fuel startup Enerkem withdrew its IPO plans last year.

With this fund, The Westly Group joins the elite club of venture firms that will continue to make new cleantech investments, including Khosla Ventures, Lux Capital and Braemar Energy Ventures.

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On Monday, KiOR, which was largely funded by Khosla Ventures before it went public, announced in its fourth quarter and annual year 2012 earnings that it has now shipped its first cellulosic diesel product from its factory in Columbus, Mississippi. The factory, which could make some 3 to 5 million gallons this year, converts wood chips into a diesel fuel that the company says can be used in current fossil fuel infrastructure.

Last week startup ZeaChem said that it started production of cellulosic chemicals and ethanol at a demonstration factory in Boardman, Oregon, which can produce about 250,000 gallons per year. Late last year, ag giant DuPont started construction on a cellulosic ethanol factory in Nevada, Iowa, which when completed in 2014 could produce 30 million gallons of fuel from corn stalks and leaves. For comparison sake, these are very small volumes in the grand scheme of the fossil fuel industry — the U.S. consumes some hundreds of billions of gallons of gas per year.

Regardless, these are signs of progress for an industry that has perpetually missed milestones and overestimated the amount of time it would take to move into commercial production. But these milestones are still steps on the way to a company producing these advanced biofuels at a scale and cost that is competitive with gasoline.

According to Bloomberg’s energy research arm New Energy Finance, ethanol made from plant waste could cost the same to produce as corn-based ethanol by 2016. Currently cellulosic ethanol costs 94 cents a liter to produce, or about 40 percent more than ethanol made from corn, says Bloomberg.

Despite these milestones, there are many more steps ahead. KiOR was expecting to ship its first cellulosic diesel late last year, and in the company’s earnings call CEO Fred Cannon apologized to investors for missing that target due to “unexpected startup issues.” KiOR also now needs to operate that factory at a steady state for another 9 months, and also buildout another factory in Natchez, Mississippi, which is supposed to produce three times what its Columbus facility will produce.

KiOR needs to finance the Natchez facility, and on that note, said on Monday that Khosla Ventures is willing to offer it another $50 million commitment and amend its previous loan agreement. ZeaChem is also looking to buildout a 25 million gallon factory per year next to its demonstration factory. DuPont is one of the company’s with the deepest pockets that is moving ahead and has been working on next-gen biofuels for a decade. Still, the process has taken DuPont longer than it had expected, the CEO told me recently.

But not everyone thinks building large biofuel factories is a smart move. Late last year oil giant BP cancelled its plans to build a next-gen biofuel factory in the U.S.

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“We’re known for big bets and bold swings, and not being like a traditional venture investment firm,” said Vinod Khosla, founder of the firm and who Om feels is one of the Valley’s “super VCs,” in an interview discussing Rabois’ addition.

“We look for people who’ve earned the right to advise entrepreneurs. So we look for people who entrepreneurs look out for and who say, ‘I want you on my board, I want you as a mentor,’” Khosla said. “And Keith, as I did my reference checks in the Valley, he was really at the top of every CEO’s list.”

Rabois’ next move has been a topic of interest among the technology community, considering his past expertise at companies like PayPay, LinkedIn, Slide, and others. His addition to Khosla was suggested by Kara Swisher at AllThingsD this past weekend, after The Wall Street Journal wrote that he might join Airbnb.

“I love Khosla Ventures’ vision and passion for assisting the next generation of entrepreneurs,” Rabois said in a statement. “The Khosla team encourages entrepreneurs to be bold. And the team’s legendary work ethic ensures that entrepreneurs will receive the best possible assistance.”

In January Rabois stepped down from Square, where he was COO, after allegations of sexual harassment by a fellow employee. Square strongly backed Rabois, and the executive wrote in a personal blog post that he had engaged in a relationship with that employee but that it had been mutual. Khosla Ventures did not comment on Rabois’ legal issues. Khosla serves on Square’s board, as Square is one of the firm’s portfolio companies.

“I couldn’t be more excited to see two of the top entrepreneurs I know, join forces at Khosla Ventures to support and coach the next generation of entrepreneurs the world over,” said Square founder Jack Dorsey in a released statement.

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But for investors that still believe in the underlying trends of cleantech — the fairly obvious notion that the world will one day need better management tactics for resources like energy, food and water — the so-called “cleantech cliff” actually has some noteworthy silver linings. The most important one of those is that there’s just not that much competition out there anymore for investors to find and fund new startups in clean power, smart grid, energy storage or tech for more sustainable transportation.

Back in the years between 2006 and 2008, investors had to compete with their peers for the chance to fund promising young cleantech companies. These were frothy times and the startups’ valuations were often higher than the investor wanted. This was the age that produced crazy-high valuations for companies like Solyndra, Nanosolar, Fisker Automotive, and others.

In contrast 2013 is basically an open field for investors that are sticking with cleantech investing. Valuations haven’t just dropped back to earth, they’re running below market value. If you believe in this sector, there’s undoubtedly some really great deals out there.

Lux Capital’s Peter Hebert, whose firm just closed on its third fund, which will partly be dedicated to investing in energy technology, described another positive affect of the weeding-out process as “people in it today are there for the right reasons: passionate, want to build real companies, not just flippers, hucksters and passers-by.” The entrepreneurs and company builders are also a lot more rational, said Hebert.

For Khosla Ventures Andrew Chung, investors that have built a substantial portfolio in energy, resource management and sustainability could use the “network effect” for their benefit during this time. The relationships we built with corporate partners, star executives, private and public funding sources can all serve to benefit multiple companies, said Chung.

Khosla Ventures is also betting that the move away from backing cleantech companies — and companies that innovate around the underlying trends — is cyclical. “Venture is highly cyclical business, and we expect sustainability investments to experience a renaissance as today’s breakthrough companies successfully commercialize and have massive impact on society’s infrastructure,” Chung wrote.

Still, it can be lonely out there for investors that stick with it. And that means there’s fewer investors willing to partner with firms like Khosla Ventures and Lux Capital for follow-on rounds. VCs commonly need partner with other investors for larger rounds.

Chung said that just means they have to be more creative and patient in finding sources of funding, often tapping global investors who continue to have enthusiasm and corporate investors who can provide strategic benefit alongside capital. Khosla also has set up multiple funds so that the firm can do early stage seed investments, and then follow-on with larger rounds for companies that hit milestones and show promise.

While it could be the best of times, there are a couple of other hurdles that loyal investors will face. Hebert said that alongside fewer investors, there are fewer entrepreneurs, as some entrepreneurs have moved onto greener (easier) pastures. In addition, there’s more pressure on the investor — from both limited partners and general partners (not focused on energy and cleantech) — to produce returns for the companies that they’ve been nurturing for years.

Then there’s the situation that word “cleantech” itself has become rather toxic, as 2013 gets underway. Investors like Lux Capital and Khosla Ventures are not using this term; they call their portfolio companies in this space “energy tech” and “sustainability investing.”

So if cleantech does come back, it’ll have to have a new and improved brand.

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A few of Lux’s portfolio companies appear to be doing pretty well. Kurion, a startup developing nuclear waste cleanup tech, scored a breakthrough deal to help clean waste water for Japan’s Fukushima nuclear meltdown. About a year ago I called them “the most successful greentech startup you haven’t heard of.” Portfolio company Shapeways has become synonymous with the emerging industry of 3D printing, and smart grid startup Gridco just launched to build a next-gen power grid using solid state transformers. Portfolio firms that have been acquired include skin company Magen Biosciences, LED tech company Crystal IS, and chip companies SiBeam and Silicon Clock.

“There’s definitely been negative sentiment towards cleantech in the market,” said Hebert, but it really “depends on the individual Limited Partners” (the groups that put money into venture firms). Our LPs still see substantial innovation ahead around energy and resources, said Hebert. Going forward in 2013 “we remain disciplined and selective,” said Hebert.

While Lux says it remains committed to energy tech investing, other firms have been unable to raise new cleantech funds, and some have dialed back or transformed their energy and cleantech focused divisions to make them more capital efficient. VantagePoint Capital Partners shut down its efforts to raise a $1.25 billion cleantech fund recently, and firms like Mohr Davidow and Draper Fisher Jurvetson have reduced their commitments and turned to backing IT-based cleantech, or cleanweb companies only. In 2012, venture capital firms put a third less money into cleantech companies compared to 2011.

Still some investors like Lux Capital still see the potential of energy and resources technology innovation. Canadian firm Chrysalix says its energy focused portfolio is doing well. NEA says its still committed to energy investing, though its scaled back a bit. Khosla Ventures still continues to make aggressive and many bets across sustainability from energy to agriculture to smart grid to biofuels.

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