Dialing Back the BTUs in Clean Tech Investing

Too many people are investing based on current Brent Crude prices, so clean tech venture investing has become the flavor of the fortnight. In today’s NY Times there is a solid Gary Rivlin piece on the current VC ardor for fuel cells and the like, and the most savvy comments come from a newcomer to the energy space, Vinod Khosla (who used to be full-time with some fund called Kleiner-something or another):

Vinod Khosla …is bullish on the clean-tech field – so much so that he stepped down as a full partner at Kleiner last year in part to devote more time to investing his own money in alternative energy companies. While he has already made four such investments over the last four years, he also doubts that very many clean-tech firms have huge payout potential.
“I have the sense that there are a lot more niche-sized start-ups out there than big ones,” Mr. Khosla said, “but some great opportunities do exist.”

While Vinod can be properly accused of talking his (new) book and trying to keep other venture investors out of the space, I think he is exactly right. Too many people are trying to boil the ocean in clean power investments that require the world to change for them to be successful. Much better is finding opportunities where you can succeed nicely even if the world doesn’t oblige, and where you succeed wonderfully if the planet plays along.