Cleantech investing = "whiteboarding"?

See this interesting article from BusinessWeek which describes how mainstream VCs are now searching for new industries in which to invest, as they look to avoid focusing too narrowly on IT and telecom. And so, naturally, in an era of high energy costs they have been drawn to emerging energy generation technologies and related investment areas. As the article describes (and as regular readers of this site will agree), it's difficult to find any large traditional VC firm that hasn't at least considered an investment in solar power recently. (Which may make one read the quote about "contrarian investments" a bit differently...)

This raises a number of questions that dedicated cleantech investors should be asking themselves:

• Are the traditional telecom/IT/biotech VCs moving into cleantech permanently, or is this a temporary trend driven by a few timely factors such as the high price of oil?
• Are the traditional telecom/IT/biotech VCs focused primarily on solar right now because it is best-positioned for a near term breakout among the many different cleantech investment areas, or is it a bit of a "herd mentality" effect at work? If the latter, will these traditional telecom/IT/biotech VCs eventually look more deeply into the other potentially lucrative cleantech investment segments, and if so, when?
• Is this a threat or an opportunity for dedicated cleantech investors?

My personal belief is that the trend of very large VCs looking to bet broadly across a wide range of investment areas is a permanent one. Unless LPs begin to invest less money into traditional venture capital (and that doesn't appear to be something that will happen anytime soon), there will be a need to look for new places in which to deploy that capital. The recent news about rising valuations is a testament to that. And the cleantech investment thesis makes too much sense to be ignored. So I do think that the traditional telecom/IT/biotech VCs are in cleantech to stay. However, the depth to which they are able to engage in cleantech will always be somewhat limited -- the nature of being a generalist vs. being a specialist. Thus, these investors will tend to invest in areas where their generalist breathren are investing (ie: solar today), and only slowly expand into other areas.

However, as Patrick Ennis' quote smartly points out in the BW article, "All the great, innovative investments are always in areas that the herd is avoiding." Thus, visionary telecom/IT/biotech VCs will look to partner with, learn from, and co-invest with dedicated cleantech VCs who can point them in the direction of "unsexy" investment areas with strong near-term potential, and who have the industry knowledge and connections to be able to both identify well-positioned companies and help them grow. The broad-based VCs will bring the deep pockets, and the dedicated VCs will bring the expertise. And in the meantime, LPs will also continue to seek further diversification by investing with both broad-based and dedicated cleantech venture firms.

Thus, to answer the last question, this trend probably is a terrific opportunity and legitimization for the dedicated cleantech investing community. ...But not without some hiccups, undoubtedly.