While the credit crisis brews, Silicon Valley thinks green!
While the markets stumble and the credit dries up- Silicon Valley thinks and invests green. As a value investor I don’t particularly believe in investing in startup companies. I have worked with angel investors and venture capitals and often times their projects do change the way we live. (Click here to skip the intro and read the full article)
Article Introduction (Via The New York Times):
It was late last winter when I began speaking with Lane and his partners at Kleiner Perkins. My conversations lasted to mid-September, just as the financial turmoil on Wall Street was leading to bank failures and jagged movements in the stock indexes. The firm wasn’t unconcerned about the crisis — problems with the markets could potentially slow down the development of some of the companies it backed. Still, most of its ventures were long-term investments. And entrepreneurs were still bringing new ideas through the door at a steady pace. “I don’t expect the credit crunch will change that,” John Denniston, a Kleiner partner, said. Indeed, throughout the summer the partnership was raising hundreds of millions of dollars to pour into clean or green technologies — in V.C.-speak, “clean tech” or “green tech” investments.
Randy Komisar, told me that the firm’s green-tech investments didn’t seem terribly risky to him because the energy market was so large and outdated. “I’m so dead certain that we’re solving the next huge problem for the planet,” he said. “I’m not very good at hitting the bull’s-eye. I need a big target. And this is the biggest target I’ve ever seen in my life.”
Article Excerpts (Via The New York Times):
“But one of the larger misunderstandings is that all V.C.’s have a Midas touch and a private jet. “I think it’s fair to say that by and large the median venture fund is a quite disappointing performer,” Lerner says. “Most of them are losers.” Still, he adds, the data suggest that a few V.C. firms — like Kleiner Perkins, or its neighbor the Sequoia Fund — seem to do well year after year.”
“Venture capital’s interest in the sector didn’t arise until price signals and climate change came into play a few years ago.” Before that, he says, green technology “was in a state of suspended animation.”
“If you look over Kleiner’s clean-energy portfolio, it’s apparent that the firm has made a number of large and risky bets. In part this is because of the evolving economics of venture capital: to get the returns its investors have come to expect — the firm says it has returned an average of $1 billion in profits per year to its investors over the past decade — Kleiner has to produce one or two magical success stories every few years. Some of the risk taking, however, is a product of the firm’s culture.”
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