Venture Capital for Alternative Energy
Venture capital for alternative energy is one of the trends of the future. Since venture capital has been associated with high risk, high return computer and internet companies for so long, why would this change?
The organized venture capital method of investment is still relatively new and has not gone through the cycles that will be part of its history when the next century rolls around. It seems that we have gone through a major revolution in the human race. It might be called the technological revolution. The fact is that things are moving very, very fast. Human beings spent millions of years looking at the sky and envying the birds before the Wright Brothers managed to bounce along above a sand dune for a short distance. Then in 100 years, airplanes crisscross our skies.
When you think of computers and speak of their history, you talk of hundreds of years of very slow progress in computing followed by such a lightening like explosion of progress, that today’s computer buyers often find their new ones outdated before they get them out of the box and running. So, it is natural that the cutting edge is on the move all the time. The high risk, high return area of the past is now mainstream, and the venture capitalist looks elsewhere for his investments.
It is very likely that the future of venture capital investment is in the area of alternative energy. A good case can be made that this is the cutting edge technology of the next few decades. The Green movement is reaching into all areas of life as environmental awareness becomes more and more acute. High energy costs, the soaring cost of gasoline, the global warming scare, and rising pollution has made people receptive to alternatives.
The ability to produce practical ways of dealing with alternative energy, more efficient automobiles, and alternative fuels offer some of the most challenging, but potentially profitable new investments. It will be important for the venture capitalist to be alert to this change. The areas that attracted his investments ten years ago will be moving into the mainstream and attracting the attention of conventional financing methods. The future Digital Equipment Corporation opportunity might very well lie totally outside the electronics realm.
It is likely that venture capital investments will be encouraging the development of alternative energy sources in the coming years. It is here that change is waiting and risks and high returns are lurking. Looking even further into the future, it is hard to predict what will come next, but there are many that feel that part of the reason we are where we are now, technologically, is the result of the courage shown by venture capitalists. They do not do what they do for purely altruistic reasons. The bottom line is still rate of return. However, when something really, really good happens to the human race, it really should be fine that the ones who make it possible enjoy a decent rate of return for their risk.