[preview]

This is an interesting perspective, but it seems to be (potentially) true of one class of startup, but there are many others, requiring much large amounts of money to start, that will still rely on VC funding.

Software startups, specifically web startups, have been a favorite of VCs (for good reasons). If those startups no longer seek VC funding, will it trigger a renaissance in funding for other startup classes (e.g. semiconductors or hardware)?

[wheels]

Biotech, greentech and embedded systems are a few areas that look poised to keep growing and need a more significant amount of capitalization to get off of the ground.

[drwh0]

but greentech will require more funding per instance than any VC firm will be able or willing to put up. show me the VC firm that is going to put over $1 billion into any single investment...when it comes to nuclear or hydrogen, a billion might only bootstrap the company. these industries are going to need massive amounts of funding. only one entity can do it - uncle sam, DARPA and the DOE

[DaniFong]

There are probably in thousands of potential greentech companies that could achieve profitability on 10 - 100 million. Probably the best example here is solar, as many companies already have achieved profitability, but there are tons of opportunities in fuels, materials, building technology, vehicle technology, water supply, agriculture, construction, data centers, refrigeration, industrial processes, road construction, and so on. There might exist companies you'd need to pump a billion into, but why attempt it?

[wheels]

There's a lot more to Greentech than energy or hydrogen fueling. Also note that most people don't consider nuclear power green. (Arguments of cleanliness aside, it's just usually one of the thing that green campaigners disapprove of.) My co-founder tonight met with the founder of greenvironment.com and I know that they're certainly not working in the billion-dollar range.

[blurry]

If you believe Al Gore, for $90MM you can build a giant New Mexico wind/solar farm that would supply enough electricity to power the entire US. (It's been a while since I saw the presentation so some details might be wrong but I am at least in the ballpark, especially regarding the price tag). Seems like 10 VC firms could easily get that sort of money together.

[helveticaman]

90 Million? The entire US? That's way off. I haven't seen the numbers, but that's like saying a car engine can get 1500% efficiency, or that a ten-year-old neighbor can bench-press 2000 pounds. It's just not in the cards.

[gaius]

"If you believe Al Gore" being the key phrase :-P

[anamax]

> If you believe Al Gore, for $90MM you can build a giant New Mexico wind/solar farm that would supply enough electricity to power the entire US.

Al Gore has over $100M. If he isn't doing that....

[amrithk]

Perhaps we could see co-investments or investment pools by several VCs.

[byrneseyeview]

when it comes to nuclear or hydrogen, a billion might only bootstrap the company.

One of the only giant LBOs that isn't a disaster area is the buyout of TXU. I would expect VCs to hand it off to PE guys if they had an asset that generated a steady, regulated cash flow.

[davidw]

Yeah, the essay needed s/startup/internet startup/ in at least one place, perhaps with a bit of explanation.

It all comes down to capital requirements. If you require a lot of money to get going, you need VC.

[jimbokun]

"Yeah, the essay needed s/startup/internet startup/"

I think if you read pg's essays for a while, you mentally do that substitution automatically.