We carefully monitor and parse every greentech VC investment andwe’ve done that for the last five years. Greentech Media provides thosetotals to our readers and the market every quarter. Subscibers to the Greentech Innovations Report receive the gory details of that information – every deal, every investor. We also strive to log every greentech VC or PE fundraise.
Here’s a partial list of the VC and PE firms that have closed or inthe process of closing a fund over the last six quarters. The total isin the neighborhood of $5 billion for venture capital alone.
There are a lot of voices of late soundingthe death knell for venture capital. The New York Times dusts this memeoff every few years. One just has to have a good memory and ignore thenattering nabobs of negativity. They’re usually wrong.
Kanellos writes about Why VC Funding is Right for Green.
Ira Ehrenpreis, General Partner atTechnology Partners had this to say: "The diversity and breadth ofcleantech funds which have raised capital in this environmenthighlights the sustained interest by the Limited Partners to invest inthe sector … even more notable, given the difficulty of thefundraising environment in general."
On the other hand, Fred Wilson of Union Square Ventures has crunched some numbers and claims that “VC doesn’t scale.” Hehas determined that: “You cannot invest $25 billion per year andgenerate the kinds of returns investors seek from the asset class,” andthat, “The number that the asset class can take on each year is around$15 billion to $17 billion. It’s interesting to note that the industryraised $4.3 billion in the first quarter of 2009. That’s a good thing.If we can keep it to that level, or less for a while, then we may beable to downsize and get returns back on track.”
Bill Gurley of Benchmark capital discusses the coming shrinkage of VC and gives some background on asset allocation.
There seems to be a consensus from VCs andthe NVCA that $500 million IT funds are going to be feeling some pain,that the number of VC firms will dwindle, and that GP salaries mighteven take a hit.
But we’re talking greentech here, not VC ingeneral – and all signs point to a continued optimism in greentech VCinvesting. Greentech VC funds need to be bigger than an IT practice. And while we might not see $8 billion per year invested as in 2008, ahealthy percentage of the total VC asset class will continue to gogreen. Factor in an economy on the mend and a few successful VC-backedgreentech IPOs (A123? Silver Spring Networks? Tesla? EEStor? justkidding about EEstor) and we are off to the races.