American VCs unfazed by China cleantech: Reuters survey

Thu Jan 28, 2010 11:08am EST
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By Larry Aragon and Peter Henderson

SAN FRANCISCO (Reuters) - Fears the United States will lose a battle with China to create clean technology for a climate-changing world don't fly with Silicon Valley venture capitalists.

The California financiers have an impressive track record, having funded small companies that eventually turned into Google, Yahoo and scores of other giants that shaped the internet revolution. After a sharp dropoff in the wake of the financial crisis, VCs expect to be more active this year and anticipate a much stronger flow of clean tech acquisitions or public offerings.

Perhaps not surprisingly, most also believe the United States remains overwhelmingly the best place to launch a clean tech business and market new goods and services -- and they are putting their money where their mouth is.

Those are some of the takeaways of a recent survey of 41 clean tech investors by Thomson Reuters.

Extrapolating from the survey responses of the venture capitalists, most of them in the United States, they plan to make up to 140 new investments in cleantech companies this year.

That would be a significant increase from last year, when the U.S. venture industry as a whole made 117 new clean tech investments, according to a venture capital database maintained by Thomson Reuters.

Pointing to the power of U.S. innovation and know-how, the respondents are optimistic the startups they finance will lead the way in creating technologies that reduce global warming even if material reductions in carbon dioxide emissions take time.

"It is likely that we will make significant technology, conservation and policy gains globally ... but material CO2 reductions will take an additional decade to register," Don Wood, a managing director at Draper Fisher Jurvetson, wrote in one survey response.   Continued...