VCs are Not Tree Huggers


Even though environmentalism is part of the cleantech investing equation, we were reminded during a VC panel held at AlwaysOn’s GoingGreen conference this morning in Davis, Calif., that cleantech investing is about another kind of green: cash.

“We are a single, bottom-line entity,” said Bill Green, Managing Director with VantagePoint Ventures. “If we pick the right company in the right sector and that company becomes a billion-dollar market cap company, the trees will get hugged.”

But which sector is going to start hugging those trees first? Kleiner Perkins partner Ray Lane and Khosla Ventures partner Samir Kaul both said they think solar thermal technology will be commercially viable in the next two years. Still, the technology will only “scratch the surface” when it comes to addressing global warming, said Lane.

An extended timeline doesn’t bother Raj Atluru, Managing Director with Draper Fisher Jurvetson. “We’re not going to make a huge dent into the production of global energy, and we’re going to be on margin for a while,” he said. “That’s OK, because the margins are enormous, we can build substantive billion-dollar companies over the course of the next ten years, and we can drive down the generation of traditional coal, gas and petroleum.”

In the meantime, the real power to reduce carbon emissions lies with the more established players. “As great as we all may be, the money we can push around is dwarfed by the actions of the major corporations active in this space,” noted VantagePoint’s Green.


Jim Beyer

I guess a big question is whether VCs are embracing cleantech because they think there is money to be made with the technology, or whether they are investing because they think there is money to be made from downstream investors that are more easily duped into thinking such technologies can make money.


In the short-term, I guess I don’t care where the venture capitalist’s heart is (assuming he or she has one) if they’re throwing billions of dollars at green industries.
However, long-term this is not so good, for if the winds of potential profit change, green venture capital will disappear faster than Arctic ice.
I suppose we consumers must keep investors convinced that we are longing to embrace more environmentally sound products and services.
By the way, the only tree a typical venture capitalist cares to hug is one of those on which money grows.

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