For many a post, I've said the U.S. government needs to get into the Venture Capital game, especially for key advanced sectors critical to the national interest. Well, read this Wall Street Journal piece to get a warm fuzzy that someone, somewhere, is doing something right.
The DOE hopes to lend or give out more than $40 billion to businesses working on "clean technology," everything from electric cars and novel batteries to wind turbines and solar panels. In the first nine months of 2009, the DOE doled out $13 billion in loans and grants to such firms. By contrast, venture-capital firms -- which have long been the chief funders of fledgling tech firms, taking equity stakes in the start-ups that will pay off if they go public -- poured just $2.68 billion into the sector in that time, according to data tracker Cleantech Group.
This is a refreshing announcement. A new Venture Capital firm is starting and they will only invest in Silicon valley based companies (U.S. would be better folks!)
But what is interesting is they are also doing angel investing or the first $50k to get started, which has died down in recent years.
Now a lot of absurdity did happen in the dot con bubble, at the same time to truly obtain innovation, one has to fund a lot of fizzle to obtain that one true spark.
It's also great that this $300M fund will be investing in U.S. companies. About time we stopped hearing the offshore outsourcing mantra and had funds being directed exclusively to U.S. technical innovation.
This is not good. Venture Capital has dropped to new lows:
Venture capital firms invested only $3 billion in 549 young companies in the first quarter, the lowest investment level since 1997, according to the analysis, done by the National Venture Capital Association and PricewaterhouseCoopers.
The amount invested was down 47 percent from the fourth quarter of 2008 and 61 percent from the first quarter last year.
Though investment in every major technology sector had double-digit declines, investment in clean-technology start-ups, which reached record highs last year, took the steepest dive.
In the first quarter, only $154 million went into 33 companies, an 84 percent decline from the fourth quarter and the lowest level since 2005, just before clean technology began to take off.
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