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Venture Capitalists See Potential in Green Businesses

VC firms across the country are seeing green in the growing number of environmentally friendly products and companies.

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This story appears in the September 2006 issue of Entrepreneur. Subscribe »

Venture capital is cleaning up its act. Long berated for investing only in high-tech industries such as software and biotech, VC firms across the country are quietly lining up behind companies with environmentally friendly products and technologies.

So-called "green" or "clean" technologies like water purification, solar energy, biodiesel and waste reclamation are garnering billions in growth capital from a new breed of VC firms, and from many of the old guard in the VC industry, too. Early entrants into this field, like the Global Environment Fund and SJF Ventures, are being joined by new boutique funds like Rockport Capital Partners and SAIL Venture Partners. Even the largest and oldest funds have caught green fever: Global venture funds like 3i and Draper Fisher Jurvetson have dipped their toes into the water by adding investments in green technology to their portfolios. Earlier this year, Kleiner Perkins Caufield & Byers, one of the largest VCs in the U.S., launched a $100 million "Greentech Initiative" as part of its $600 million 12th fund.

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