Venture Capitalism To the Rescue

theodp writes "Al Gore, Bill Joy, and a Norwegian cutie — a TH!NK open electric car — grace the cover of the latest NYT Magazine, which asks: Can the venture capitalists at Kleiner Perkins reduce our dependence on oil, help stop global warming, and make a lot of money at the same time? While Kleiner Perkins — which funded Genentech, Netscape, Google and others — has a number of other green-tech bets, a partner says its goal is 'to make a lot of money for our investors,' not to save the environment."

Wow. What a coincidence.

its goal is 'to make a lot of money for our investors,' not to save the environment."

That's the exact same mission statement as Generation Investment Management [generationim.com].

Obvious

Because too many folks in the past, wanting to do good, have started investment funds or invested in things to make a change and lost their shirts.

By stating the obvious (to us anyway), they're letting any potential investors know that they're not going to spend money on losing propositions just to save the planet.

I would also like to add, if they really want green investments to pay off, they should also lobby Congress to get rid of the many oil industry subsidies and tax breaks. That would make oil more expensive - actually, it should allow oil to be priced so that it reflects its true costs. The oil industry is a prime example of how tax and government subsidies can distort a market to the point that one of the most inefficient and polluting fuels had become predominant and other sources of energy have a hard time competing in the market place because of the false reduced costs imposed by Government. I think adding even more tax breaks and subsidies to an energy solution is not the way to go. We need to eliminate the current ones on oil, gas, and coal. And it will help reduce the amount in the tax code.

stealth tax sibsidy

There's some huge number of dollars involved-well over a trillion by now just in this decade- in keeping the military in the mideast, and I think there might be..one or two..people left who don't think it has anything to do with oil. Same with nuclear power, all the big fuss over iran is over nuclear technology once you get down to it, because the tech itself is inherently unsafe/dangerous-the potential anyway. Put those ongoing costs directly on the electricity bill from nuclear and directly on the prices

Re:stealth tax sibsidy

I just don't think big oil is the major recipient.

Perhaps you are un aware of the windfall profits of the major oil companies since the start of the Iraq War.

"By just about any measure, the past three years have produced one of the biggest cash gushers in the oil industry's history. Since January of 2002, the price of crude has tripled, leaving oil producers awash in profits. During that period, the top 10 major public oil companies have sold some $1.5 trillion worth of crude, pocketing profits of more than $125 billion. [msn.com]

"Exxon beat its own one-year-old record for the biggest corporate profits ever by 3 percent. Put together with the announcement by the No. 2 U.S. oil company, Chevron, of an $18.7 billion year, up 9 percent over 2006, plus the earlier results of Shell and ConocoPhillips, and that's more than $100 billion in profits from four companies. It's all thanks to the historic 35 percent climb in worldwide crude oil prices in the second half of 2007, ending the first week of this year when oil briefly touched $100 per barrel...Exxon Mobil's profits are 80 percent higher than those of General Electric, which used to be the largest U.S. company by market capitalization before Exxon left it in the dust in 2005. The new economy? Microsoft earns about a third as much money. And next to Exxon, the world's largest retailer, Wal-Mart, looks like a quaint boutique, with annual profits of about $11 billion." [usnews.com]

Just because they aren't getting money straight from Uncle Sam like the military industrial contractors are, don't think that this war hasn't served to make oil far more profitable than ever, and don't think that is any surprise to the oil man in the Whitehouse.

Re:Obvious

Making a better than normal return on investments has always been about timing. Many a sound plan has failed because it was too early or too late.

In the early part of the dot com era, a lot of money was invested on businesses that could not generate cash until man more people had Internet connections at home. Back in the 70's oil crisis lots of creativity was going into alternative energy and conservation technologies -- just before oil prices started to drop. When everyone knows change is coming, most people will lose money getting the timing wrong, and a few will make a lot of money.

That's just investing.

Now consider: if you had to have heart surgery, would you go to a doctor whose specialty was "ethically responsible surgery"? No. You'd go to a surgeon and expect him to be socially responsible. Maybe you'd want to know what his standards of ethics are and how those ethics are enforce. But you wouldn't put yourself in the hands of somebody who uses ethics as branding.

The problem is we don't need SOCIALLY RESPONSIBLE investment funds, we need socially responsible INVESTMENT funds. Social responsibility should be something a well run fund has a philosophy and strategy for, like any other aspect of investment. It shouldn't be left to specialists.

I suspect, also, that "social investment", if I may use that term, is also a matter of timing. No investment is likely to be totally free of ethical issues, but economically driven change always happens at the margins: the next dollar spent or not spent. So if you look at a collection of investments, at any time there will be a small number of them where moving some dollars will have a big effect. Choosing to lose money everywhere means you lose money; choosing to lose money in selected places may actually mean you secure your future, since most socially "irresponsible" business practices are short sighted.

That's investing too.

Re:Obvious

I considered a "socially repsonsible" investment fund at one point. Then I realized the thing had pathetic returns

Considering that every American taxpayer just got raped to the tune of $850 billion just two days ago, I would have to say that irresponsible investments have pretty pathetic returns as well.

Re:

Oh, so making the planet inhabitable and inhospitable to human life is going to help the poor?

The cost of oil is going to continue to rise, subsidies or no. At the end of the day, shrinking supply + increasing demand == more $$$$. There's no stopping that force in a free market system. And free market economies are the force driving the global economy, like it or not.

There's no reason why we shouldn't end government subsidies on big oil.

Re:

Believe it or Not, That slogan is more of a marketing message.
To attract investors you need to be sure that you are not making you seem like a charity where you spend you money and at best you get a bit of a tax break. This is investing your money and hopes to get a reward out of it. It isn't a bad thing. America is one of the biggest givers to charity in the world, however showing people the long term financial goal of this will help get more investment.

Great timing, actually.

Sure, the stock market's bad. Really bad. Oddly, that's what makes for very good timing here - because even though a lot of people have less money to invest, there's a lot of other folks who are looking to take their money from places they used to believe as 'safe', and put it where some of it will make money back to recover from recent failures. That includes mutual fund companies, and several other sources of megabucks.

There's also a lot of potential researchers who can spend a lot of time on these projects, at relatively competitive rates. And a lot of existing data to pull together from university projects that individually have been starved for resources. That, and there's a slight possibility some politicians may be able to make a sane infrastructure to provide at least some support in upcoming budgets.

Sounds like excellent timing to get a massively multiple-approach research project like this underway. It might even save a small part of our economy through the continuing troubles.

Ryan Fenton

Making money from VC is OK

provided they take the long term view. It is no coincidence that the UK Green movement has definitely aristocratic supporters, because an aristocracy tends to think about its grandchildren (to the extent of things like planting trees that will not mature in their own lifetimes, for the sake of future generations.) I like to think that really sophisticated venture capitalists will be planning now for a comfortable retirement in 30-40 years time - and will therefore be worrying about what the world will be like then. Hedge funds are full of people with a short term attitude - anybody who shorts stocks has that - who just assume that they can accumulate so much wealth that they can insulate themselves from everything short of global meltdown. Which has just worked out so well...but real venture capitalists are an engine of progress. Without them no USA (who funded Columbus and the first colonies?), no canals, no trains, no telephone, no modern medicine.

EEStor, Another Kleiner Perkins investment

EEStor is another interesting electric-car-related Kleiner Perkins investment http://www.businessweek.com/the_thread/dealflow/archives/2005/09/kleiner_perkins_1.html [businessweek.com]. They have patented technology for super capacitors with over ten times the energy density of lead acid batteries. Being capacitors without electrochemistry, the power density (charge/discharge rates) is also very high.

The trick is that they use a doped barium titanate dielectric with a very high permittivity structured as a sub-micron grain composite interspersed with thin Aluminum oxide and glass layers to lower the breakdown voltage. http://peswiki.com/index.php/Directory:EEStor [peswiki.com]. The big gain over normal capacitors happens because the energy content of a capacitor goes as the voltage square, and the overall relative permittivity exceeds 10000.

The internal combustion engine is obsolete.

Re:

The entire field of capacitive (solid-state) batteries I found very interesting. What undermines the technology, from my perspective, is that there seems to have been so little progress in the last three years.

Are EEstor and related technologies going to be realised or are they vapourware?

Re:

By independent accounts they have been realized. Lockheed Martin for example has taken out a license and confirmed the performance claims that EEStor makes http://gm-volt.com/2008/01/10/lockheed-martin-signs-agreement-with-eestor/ [gm-volt.com]. When the technology will make it to the market is still a bit of an open question. In 2009, supposedly. But given the big vested interests in the oil industry, I would not be surprised if it will be delayed.

Re:

I was aware that there were early adopters... but, I'm afraid, I'm a cynic.

Given the revolutionary potential of so many applications, I find it difficult to establish why investments are so small. If the technology is ripe for production and can be demonstrated, I can't imagine it being difficult to get substantial funding and put this into mass production.

Electric Cars ... the Silent Killer

Imagine driving on a warm summer night with the wind blowing through your hair and hearing nothing but the sounds of nature.

Imagine crossing the road on a warm summer night, a gentle breeze blowing through your hair and hearing nothing but the sounds of nature ... and then: BAM! Hit by an electric car."

There are some small electric cars in London, they're eerily silent.

Just to clarify, I do think that this is a good technology and it is the future, but I am sure that there will be accidents because the cars are silent.

Re:Electric Cars ... the Silent Killer

The noise difference is not nearly as large over 50 km/h because then the road/tire noise starts to dominate over engine noise. Electric cars are silent only at low speeds.

Re:

I've heard of many cars where dominating noise at low speeds sounds something like this "Boom, boom, boom, boom, boom, boom, boom, boom, boom, boom, ...". You can hear it clearly even when the car is stopped at traffic lights.

Re:Electric Cars ... the Silent Killer

I saw a slot on the BBC regional news for East Anglia about 2 months ago about a project to make electric cars louder, precisely for the safety of pedestrians and cyclists. They were going with the obvious solution: fit loudspeakers at the front of the car, and play a recording of an internal combustion engine.

Re:

This argument has been used by Harley assholes for a long time, and it's simply not valid. It may be that louder vehicles give more clues as to their whereabouts--but if that is the case, we should be duct-taping our horns down, or building in beepers and sirens to continuously wail (or wail at variable pitch depending on speed (and direction??)).

Don't get me wrong--I think driving should be made as unpleasant as possible in order to encourage people to use more responsible forms of transportation--but t

Ugly

Why do people insist on making electric cars ugly as hell?

Re:

Why do people insist on making electric cars futuristic as hell?

There. Fixed that for you.

New Yorker cartoon, 9/9/2002

The CEO is giving a speech at a board meeting: "And so, while the end-of-the-world scenario will be rife with unimaginable horrors, we believe that the pre-end period will be filled with unprecedented opportunities for profit."
http://www.cartoonbank.com/product_details.asp?mscssid=G41AMWKD2J779JFDMBDRM9CAKAKJ63T5&sitetype=1&did=4&sid=52630&pid=&keyword=end+of+the+world&section=cartoons&title=undefined&whichpage=1&sortBy=popular [cartoonbank.com]

They're coming from everywhere

Electric Cars are coming from everywhere, in different sizes and shapes, with different concepts. Some will append the electric motor to a a ignition engine generator (making it a hybrid). Some are tricycles using solar back-up power. Others are super-sport cars. It is all very interesting.

Back in February I was so amazed with the variety that I posted in my blog thirty different electric and hybrid cars from all over the world. From the established auto industry of Japan and the US down to individual projects, this is a really special moment for entrepreneurs, inventors and creative people. The blog post is in portuguese, but there are pictures and reference links for all 30 electric car models [simplesmente.com].

Sorry for the plug. Cheers.

Re:

Electric Cars are coming from everywhere, in different sizes and shapes, with different concepts. Some will append the electric motor to a a ignition engine generator (making it a hybrid). Some are tricycles using solar back-up power. Others are super-sport cars. It is all very interesting.

And they will all go straight to Europe, Asia, and even South America. But I tell you not a bloody one of them will ever see large deployments here in the US. The market has been brainwashed against them, the laws and regulations are stacked against them, and the US has a failing Ford, GM, and Chrystler. The best the US will get is a 10-20% fuel economy increase on its passenger vehicles. In fact the US has already received an installment on that very thing with the 2008/09 model years.

Even in the high

too bad

It's too bad for the all the small private companies that have been investing in green vehicles. The government just gave the big guys $25 billion dollars to retrofit their plants to make "more efficient" vehicles. It's hard to compete against free government money. This waste will contribute to more problems in the future. Why make a risky bet on alternative energy? Just invest in the same old inefficient technologies, and then when it's way too late to switch over, the government will bail you out.