Big Money to Silicon Valley
By: Tech Believes
A Billion Bucks For Start-up Tech Firms Going Green
Backed by the success stories of Sun Microsystems and empowered by his billions of dollars in capital, Vinod Khosla is at it again. He’s pouring a billion bucks back into Silicon Valley to make the world a bit greener, technology a bit more progressive, and maybe his wallet a bit fatter.
Just yesterday, Khosla Ventures announced that they have raised $1.1 billion for two funds. Vinod Khosla’s venture-capitol firm has solicited funds from outside tech investors and from public sources for a major influx of money into exclusively green technology projects. It is the biggest dedicated fund of its kind in the last three years. This is received as good news for the reviving tech sector as well as for environmental technology research, which Khosla predicts will be big in the years ahead.
Both funds are focused on green tech research as well as IT startups with a focus on innovation and environment. The first fund, the larger of the two, consists of nearly $800 million. The goal of this “Khosla Ventures III Fund” is to aid the traditional pursuits of solar power, biofuels, energy efficiency, renewable batteries, and similar research. As Khosla himself remarked, it’s for “almost anything that can be made renewable, sustainable, more efficient and cheaper.” The money will flow toward research-focused firms which are in their early stages or mid-stage of research. One fourth of this fund was filled by CalPERS (California Public Employees’ Retirement System), which boasts the biggest public pension fund nationwide. Sheeraz Haji, who advises green tech research, regards this as a good omen for the future of the fund: “the fact that an investor like CalPERS is stepping up is a good sign.”
The other side of the fund, $250 million worth, is not for your traditional technology. It’s for the wilder side of green research, the kind that Khosla describes as firms who will “take risks that nobody else will take.” Khosla is one to take risks, which is part of the reason he is so successful. But clean tech start-ups which are commonly regarded as too pricey and too risky for investors, are just the kind of start-ups that Khosla wants to empower. He describes the investment strategy as an old-school strategy with a new-world focus: “This is the 1980s style of venture capital — real technical risk with small amounts of money and small teams.” And, while some of the money may get spilt along the way, that’s part of investing, according to the experienced investor himself, who said, “We will often invest in things that have a high probability of failure.”