Where the Road Leads

Last night I attended a cleantech networking hour in Cambridge (although I bought my own pint before realizing that sponsor Flagship Ventures had spring for pitchers). Good mix of VCs, entrepreneurs, headhunters, students and folks looking for work. 

One general topic of conversation revolved around bubbles. Not surprising, of course, particularly given that VC firms keep adding money and personnel to the sector without a corresponding growth of quality dealflow. But one VC was more worried about mini-bubbles within the sector, with his latest example being the electric car phenomenon. Just yesterday, another such company raised a massive $60 million infusion. It may well end up working, but I’m not so sure that VCs are the folks who should be doing what basically amount to project finance deals. Or, even worse, what could oxymoronically be considered pre-revenue mezzanine deals.

 

Maybe the bet is that these types of deals – plus biofuel production deals – are actually less risky than typical cleantech, which closely mirrors life sciences in both its hit rate and run time. But it’s a pricey bet that should make LPs a bit nervous…