11/13/2008
Clean Technology Investors To Shift Investment Focus in 2009
Palo Alto, Calif. – November 13, 2008 – Shifting priorities from investments in areas such as biofuels and solar production to less capital-intensive technologies such as energy efficiency, monitoring and IT/software was a dominant theme among attendees at Cooley Godward Kronish’s inaugural Energy Efficiency Conference held this week in Silicon Valley.
In a survey of 72 clean technology entrepreneurs, venture capitalists and other industry professionals conducted by Cooley at the conference, 70 percent of venture capitalists surveyed say they will target investments toward less capital-intensive clean technologies in 2009.
Perhaps even more telling, only 38 percent of respondents believe that debt and private equity markets will be accessible to invest in clean technology companies looking to commercialize or scale their technologies or plants. More than 60 percent of respondents see an increase in the exit of clean technology companies through consolidation or dissolution in 2009.
“Notwitstanding these unprecedented economic times, investors and entrepreneurs continue to be bullish about clean tech innovation as a fundamental driver of the economy over the long term, but in the near term investors will be increasingly selective, many favoring less capital-intensive investments opportunities, including in the area of energy efficiency,” said Gordon Ho, head of Cooley’s Clean Technologies practice.
Weighing in on President-elect Obama and the new administration, fewer than 25 percent of respondents expect that a significant level of the $150 billion pledged by Obama to catalyze private efforts to build a clean energy future will be invested in 2009. However, there is strong consensus among respondents that the top priority for any federal investments should be to increase R&D funding for clean energy projects. Those surveyed believe the second-highest priority should be expanding federal tax credit incentives to small businesses. More than 75 percent of respondents see Silicon Valley leaders taking a more active role in Washington to support growth of the clean technology sector under the new administration.
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