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Continued from previous page
Capital Markets Are Open for Business
Elon Musk shares Schecter's optimism from the other
side of the investor relationship. He said that although
his goal in investing in both Solar City and Tesla is to
find solutions to climate problems, that aim will almost certainly
reap a profit as well.
His hope is supported by recent events. In the past two
years, several solar companies made huge IPOs. In 2005
SunPower, a unit of Cypress Semiconductor, raised $139
million in an offering underwritten by Credit Suisse Group
and Lehman Brothers. Chinese solar company Suntech
Power Holdings raised $400 million, and in Germany, QCells
raised $288.5 million.
No wonder that clean technology has strong investment
support via VCs, private equity, and traditional investment
banks with an eye on the future.
According to the 2006 Cleantech Venture Capital Report
on North American venture capital investing, by 2009, 10
percent of all VC investment activity will be in the arena of
clean technology ? up from 3 percent from 1999-2001.
That amounts to between $6.2 billion to $8.8 billion invested
as venture capital firms go to the markets to raise capital
in an estimated 1,000 rounds between 2006 and 2009. The
energy component is the fastest growing sector, comprising
upwards of 70 percent of investments in the industry, according
to EnerTech's Tucker Twitmyer.
And those sums don't include the internal investments
that public companies like BP and DuPont are pouring
into clean technology.
At November's Impact Conference, Ranieri shared the investment
philosophy he follows at DuPont, a 200-year-old
company that is transforming itself for a sustainable future.
"Our commitment is to create shareholder value and societal
value at the same time," he said. "There is an upside to creating
shareholder value in an environmentally sustainable fashion.
Being green isn't good just for itself ? it's a proxy for
good management."
And if the projects funded take off, the whole world will
benefit, not just the investors.
Musk concurs. "I think most of the things that do good
in the world are also things that make money," he said. "It's
unusual where you have a situation where doing good is incompatible
with building a valuable enterprise."
Martha Mendoza is a working journalist and a Pulitzer Prize
winner. This article includes reporting from Knowledge@
Wharton, "The End of Oil? Venture Capital Firms Raise the
Profile of Alternative Energy," published April 26, 2006.
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