Cleantech Investment Caused Shake Up of Kleiner Perkins
December 31, 2013
The article titled The Shakeup of Kleiner Perkins Exposes the Shortcomings of Venture Capital on GIGAOM discusses the controversial bet the firm made on cleantech under the reigns of John Doerr, who has seen Kleiner through the good times in the nineties internet investing phase and the bad times. The article suggests that Kleiner Perkins’ is not alone, especially if you accept the premise that venture capitalism is not a good fit for the energy sector.
The article explains:
“traditional VC hasn’t proven to be a good model for funding many of the sectors in cleantech, such as making solar panels, producing electric cars, and developing biofuels. It’s not good at funding basic scientific research, like driving breakthroughs in battery chemistry. Many of these technologies have needed more money and taken longer to scale up from lab to commercial product than afforded by the traditional venture capital time frame.”
If a VC firm doesn’t get a return on an investment for a long enough time, they will have trouble raising capital and moving on, explaining Kleiner Perkins’ current difficulties. (For a comprehensive history of the firm’s, and Doerr’s rise and fall, read John Doerr’s Last Stand). Ultimately, the article suggests that the onus is on corporations to stir and fund innovation through research and development.
Chelsea Kerwin, December 31, 2013
Sponsored by ArnoldIT.com, developer of Augmentext
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