Environment Forum

from DealZone:

VCs pursue new thrills

Are Silicon Valley's best-known venture capitalists tired of funding startups?

Kleiner Perkins just announced a joint venture with another cleantech-focused VC and a Norwegian car company to sell electric cars in the U.S. market. It's a 25-25-50 partnership, with each VC owning a 25 percent stake in the newly formed company.

And just a few days ago, Thomson Reuters' pehub.com reported that Sequoia, arguably the Valley's most illustrious VC, may raise a $750 million hedge fund.

That may partly explain why VC investments in startups fell 5 percent in the first quarter from the year-ago period. Where are the Googles and Amazons and Yahoos that set the pulse of many a VC racing, once upon a time?

Photo: The Think City, the first car the Kleiner JV will sell in the U.S.

from DealZone:

If it’s bloggable, is it a bubble?

Blogs have been abuzz for a while about a bubble forming over the cleantech sector -- what with all the dollars flowing into the sector's search for clean-and-green power, energy, transportation -- and whether a dotcom-like burst is likely. But venture capitalists take a rather more nuanced view, although two out of three believe the sector is getting overvalued.

Cleantech will see the same "waves of enthusiasm" that other darling sectors for venture capitalism, like information technology, have seen, said John Denniston, partner at Kleiner Perkins, the storied Silicon Valley firm most recently in the news for bringing Al Gore on board to focus on its green investments. "It's the nature of the venture industry and wouldn't surprise me if we see the same waves in the greentech sector," Denniston told Reuters at the agriculture and biofuels summit.

Rodrigo Prudencio, a partner at cleantech-focused VC Nth Power, said bubbles may be forming over solar energy and biofuels, areas where too many dollars are chasing too few deals. But it's too early to tell whether there will be a "pandemic" across the diverse cleantech sector, he said.

Pandemic or not, it's definitely something VCs were discussing at a venture summit last month. Mohr Davidow Ventures general partner Erik Straser said at the summit there will be "flameouts" in the cleantech sector this year. "And a lot of capital has gone into a lot of companies."

Despite these niggling concerns, VCs are assured of cleantech's long-term potential and this year, the industry is expected to put even more money into these startups. After all, the global market for clean technologies is expected to reach $1 trillion in 25 years, and VCs wouldn't be VCs if they didn't outlast the blips, blogs and flameouts.

(We updated this blog post to fix the spelling of Rodrigo Prudencio's name. As you can see, it is not "Prundencio.")