Wall Street Journal: Why Venture Capitalists Gave Up on Renewables

Watts Up With That?

money_sucking_vortex

Guest essay by Eric Worrall

Wall Street Journal has written a fascinating explanation for why venture capitalists have given up on renewables.

Why Venture Capitalists Abandoned Clean Energy

Two experts say high costs and low returns sent venture capitalists fleeing. A new funding model, they say, is crucial.

A decade ago, clean-energy companies were the hot trend that venture capitalists were chasing. Oil and natural-gas prices were on the rise and Al Gore’s “An Inconvenient Truth” had just made its premiere.

But high hopes that the clean-energy sector would replicate the big returns of biomedical and software startups quickly faded. Instead, monumental losses piled up: Venture-capital investors lost more than half of the $25 billion they pumped into clean-energy technology startups from 2006 to 2011.

A study of why venture capital and clean energy haven’t been a good match was launched by Benjamin Gaddy, director of technology development at Clean…

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