Trouble For the Green Startup Revolution?

With the onslaught of economic turmoil, no industry has remained on the sidelines in terms of being hit financially. Everything from to reduction in overhead, slashing employee benefits or the employees themselves, to a decrease in expansion. The latter has the propensity to hit the private equity world the hardest, seeing as innovation in new business ventures is the life blood of the industry. No where could be more evinced is in the green biz revolution. 

Anyone who is anyone in the PE world (or related to it) has jumped on the band wagon, case in point with Silicon Valley based Kleiner Perkins Caufield & Byers adding green tech as a team and picking up eco beneficial companies left and right. Every other KPCB of shoot has been following in similar fashion with virtually every reputable firm picking green companies. All this increased activity wasn't just because An Invocation of Truth was tugging on the heart strings of general partners all over the country; finance for long-term, capital-heavy projects such as offshore wind farms, solar parks and waste-recycling plants was up 15% to $97 billion in 07, according to New Energy Finance a quasi watchdog group for the green biz. However returns in the following year where dismal, mainly in my opinion to the priority shift in the consumer market from going green to just staying afloat.

There has also been a resurgence investment into the once thought defunct electric car, with Draper Fisher Jurvetson & KPCB making sizable series A funding rounds

to electric car companies in Sweden, India, and California. The primary goal being to dump them off on GM in the US

and Ford and Fiat in Europe, but with the aforementioned priority shift in the consumer markets and the investment world

the electric car may have seem to hit another snag. Which I hope is not indicative of the portfolio as

a whole. Green tech has the possibility to bridge tech fields that could spawn a whole new era

of R&D, and innovative entrepreneurs shouldn't be deterred by the current economic strife.