Investment in “green growth” companies is getting displaced by the government according to Dan Primack at peHUB.
He reports that venture firm CMEA canceled plans to raise $500 million to invest in cleantech companies. The fund was going to be aimed at late stage ventures, but the firm had a change of heart, feeling it was more suited to invest in earlier stage companies.
The interesting twist in the story is that CMEA was looking to raised the money to fill a void that sprang up in the winter when credit froze. With cleantech companies, the amount of funding needed to get projects up and running is usually pretty high. Fisker needed $85 million from Kleiner Perkins. After that, it got $528 million from the government to make cars.
Fisker told us it could get by with out the government money, but clearly, it jolts the company into another stratosphere.
If this is a possibility for many other companies–later stage investment from the government for big bucks, it seems that many cleantech VCs will stick to the early stage investments, taking smaller risks with smaller pools of money.
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