The cleantech myth bashing

Vinod Khosla at his buzzkill best. He is beginning to like “black swan solutions” that cause technology shock as he believes that many of the current concepts of cleantech investing are just "greenwashing" and not a solution to the climate issues. He’ll find a lot of backers from among the puritan VCs.

He finds photovoltaic panels in the booming $20 billion PV market are not scalable and not sustainable without subsidies. The Prius Hybrid cars? Not a solution to the energy or the climate problem nor did they meet the Chindia test - since they don’t seem to compete with the $2,500 Tata Nano. He calls hybrids "an inefficient carbon solution". Biodiesel, Clean Coal and Zero Emission Buildings are not the solutions either. Carbon capture and sequestration also do not serve the purpose as they are not economical. Solar PV, wind and biofuels are “little markets”.

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Now wait a minute.... Can they deal with the financial crisis and reduce emissions at the same time? Take the Big Three automakers in Detroit (or its users). Who will expect them to invest in fuel efficient engines as they fast slide into insolvency? Isn’t gas available at $2 a gallon now?

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Makes no sense.How about the VCs that have sunk some real big money? Poor fellas’ they get killed often by the publicity they give themselves. They had better learn to swallow some wily pride. At least it’s non fattening!

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Worst VC investments of all time

You pitch your business plan to a VC and he bites in. Funnels millions of $$ into your business and hopes to exit with some tidy profit. When it goes well as planned, oh, great. What if it doesn’t and the investment backfires?

Some things were just never meant to be, but that doesn't mean that investors won't pile millions of dollars upon a bad idea — or even a good idea gone bad. Whether they crashed and burned or sucked investors dry, these ventures just didn't work out. Check out our graveyard of dreams and money to get a look at VC (venture-capital) investments that just weren't wise.

Here’s a list of startup flameouts. [Good friend Matt Marshall piled up the quick list ]

Amp’d Mobile: $360 million, ended in bankruptcy.
Procket: $272 million, sold for $89 million.
Webvan: Valued at $1.2 billion, went bankrupt in 2001. Ate through $800 million in venture capital, ended with $830 million in losses.
Caspian Networks: >$300 million in funding, closed doors.
Pets.com: $50 million by Hummer Winblad Venture Partners, Bowman Capital, and Amazon.com Inc., did sock-puppet ads, then crashed.
Optiva: $41.5 million in venture capital, crashed.
Kozmo.com: $250 million in investment, liquidated.
CueCat: $185 million from investors like The Coca-Cola Co. and General Electric Co., bombed.
DeNovis Inc.: $125 million in venture capital, closed.
PointCast Inc.: Tens of millions of dollars in venture capital and a $400 million buy offer, PointCast was sold for $7 million.
eToys: Backed by VC firms Idealab, Highland Capital Partners LLC and Sequoia Capital Partners, ended in bankruptcy.
AllAdvantage: $135 million in venture capital down the drain.
FastForward: $54 million into the company, bankrupt.
Xoma: This 26-year old company has not earned a profit since its inception in 1981.
Flooz.com: $50 million, went broke.
Vanguarde Media Inc.: $60 million in VC funding, went under.
Pixelon.com: $16 million not remarkable, but burned through with remarkable style.
Bolt Media Inc.: >$60 million in venture backing, shut down.
DigiScents: $20 million in investment, shut down.
Boo.com: $120 million, went bust.

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What could be Indian VC's take...?

Fred Wilson, VC from Union Square Ventures has this take on the dooming fortunes of VC industry. Pretty candid analysis. This is despite the fact that there exists a selection bias on data VC firms choosing to report.

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Would love to look at similar analysis by some Indian VC that gives a true picture of the state of Indian VC investments and the fortunes of its investors. Will some c(d)are...?

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