We wrote this morning about John Doerr’s prediction of a Netscape moment next year in the cleantech IPO market.
Doerr, forever the optimist and a partner at Kleiner Perkins Caufield & Byers, could be right. Perhaps the first-day run up of an offering from BrightSource Energy, Silver Spring Networks or Bloom Energy sparks public enthusiasm for cleantech sector in general.
But many VCs don’t sign onto the thesis. And they made their views known at the GreenBeat 2010 conference here at Stanford University. Many suggested cleantech investors would be better off to not expect miracles to occur every two years or so.
“This is a marathon, not a sprint,” counseled Navin Chaddha, a managing director at the Mayfield Fund.
A Netscape moment–as Doerr predicted–may in fact not take place in cleantech, suggested Paul Holland, a Foundation Capital general partner. Instead, the industry could see Intel or Cisco Systems moments, opportunities for potentially powerful companies to sell stock, but without the public fascination of a Netscape, Holland says.
He said he expects hundreds of attractive companies to be created over 20 to 30 years and that investors will earn handsome returns. But “it’s not an overnight thing,” he says.
Clearly, the notion of an Intel moment is more realistic alternative to Doerr’s assumption of a Netscape epiphany. Especially with the quality and focus of companies and innovation steadily improving, as Kevin Skillern, managing director of venture capital at General Electric, will attest. The next 10 years will bring lots of opportunity, even as the number of venture firms investing in cleantech has diminished, says Skillern (pictured here).
The trouble is that a number of venture firms rushed into cleantech by backing dozens of investments and their companies are now hungry for money, Holland says. “We’re in the pain portion of the program and that’s why you’re seeing the de-acceleration in investing,” he says. (Cleantech investing was off 30% in the recent third quarter.)
A Netscape moment might be nice in the space. But it is worth acknowledging that home runs take place less frequently than singles and doubles.