Clouds On The Horizon For VC-Dependent Cleantech Startups
In the U.S. renewable energy and cleantech companies, will find it? more difficult to secure early-stage financing, concludes? a survey??released yesterday by the National Venture Capital Association and Deloitte & Touche.
The survey, which measured the opinions of more than 500 venture capitalists worldwide,? shows that more than 90 percent of U.S.? respondents expect the number of venture firms to decrease between now and 2015.
Some of the issues faced by the U.S. VCs? include a more challenging fiscal environment. Indeed,? Congress is pushing to tax at a higher bracket the gains partners at private equity and venture capital funds earn for their investors, also known as carried interest. This is the first time tax and regulatory issues are cited as concerns by investors, reports The Wall Street Journal’s Venture Capital Dispatch.
In a very short time the cleantech / renewable energy sector has emerged from being an “after thought” for venture investors to become the source of some of the largest venture deals.
For 88 percent of U.S. venture capital investors managing a successful exit, via a sale to a strategic investor or an Initial Public Offering (IPO), is also a major concern. That is particularly true for greentech and renewable energy, where a high number of promising but cash-hungry startups never make it out of the? the much-dreaded “valley of death.”
Contrasting with the gloomy outlook of U.S. and Canadian investors, are the bullish sentiments of BRIC economies, (Brazil, India, Russia, China), where early-stage investors expect the number of venture capital firms to grow, not shrink, over the next five years.
Mark Jensen, Deloitte & Touche’s managing partner for venture capital services says that the BRIC VC community is active and here to stay:
Traditionally strong markets like the U.S. and Europe will continue to be important hubs despite consolidation in the number of venture firms. However, the stage has now been set for emerging markets like China, India and Brazil to rise as drivers of innovation as they are increasingly becoming more competitive with the traditional markets.