Cleantech investing = "whiteboarding"?
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?
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.