Ray Lane has a few things to say about the cleantech venture capital market, and he's not afraid to beat around the bush.
The Kleiner Perkins Caufield and Byers partner recently sat down with our friends at Earth2Tech to discuss the differences between funding cleantech companies and software startups like Facebook, and why the former is a far longer play than the latter -- with a potentially more lucrative payoff.
Five highlights from his interview with editor Katie Fehrenbacher:
- The cleantech stakes are much higher than for Internet startups. Unlike Lane's new all-electric Fisker Karma, "Facebook doesn’t risk killing anyone when it first comes out. You can’t build a car company in 3 to 4 years, it’s impossible."
- Cleantech companies have a 6- to 7-year outlook for returns and IPOs. "Fisker has the potential to be the same value as [FarmVille creator] Zynga."
- Cleantech and software carry entirely different business models. "Most software companies have 90 percent margins, and after you include development, and services, maybe 50 percent to 60 percent margins. You’re never going to get that with a car company. I’d be thrilled with 20 prcent gross margins for a car company."
- Predicting the next big thing in Kleiner's greentech portfolio. "I think there are big opportunities with Bloom Energy, Miasole, Silver Spring Networks, Enphase Energy, Macoma, Fisker, and GreatPoint Energy." On the other hand, "Out of the 70 greentech companies we’ve invested in, 20 of them will make no difference."
- Predicting the next big thing in the cleantech market. After ventures in biofuels, solar, wind, coal-to-gas, thermal electric, waste-to-energy, electron storage batteries and water, "We’re starting to do a bunch in agriculture. Everything from changing the productivity of seeds to making fuels and producing sugars."
You can read the full interview here.