As the price of oil has skyrocketed, he said, venture capitalist interest in alternative energy sources has gone up correspondingly. Davis used a famous Australian quote to explain it: “When the price of eggs is high enough, even roosters will start to lay them.”
Cleantech now gets roughly 10% of venture investment, but "before 2005 less than two-tenths of 1% of venture capital went into cleantech. Now the amount of money going into it in any individual
quarter [since 2005] tops the total amount that went into it in all
preceding years. That’s how fast investment for this sector is growing."
Davis said that the three factors that VCs look for have all appeared in cleantech: large markets; talented management teams; and a strong value proposition. The major factors combining to drive investment in cleantech are:
- high demand due to the cost of oil and gas
- global warming
- government incentives
- energy security
- social responsibility
Davis also believes that alternative energy could be an even bigger market opportunity for venture capitalist than the Internet was. "Energy is international," said Davis. "The Internet, software and biotech were all dominated by the U.S., but energy is a worldwide opportunity." — George White
See additional coverage of the Alternative Energy Symposium
