Venture Capitalists Tout Sustainability

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vc-sustain.jpgThe most interesting session I attended at the Milken Institute's 2009 Global Conference was The Next Generation of Venture Capital: Hot Ideas from Sand Hill Road. (Sand Hill Road in Menlo Park is known for its high concentration of venture capital firms.)

The panel was enthusiastically moderated by Kara Swisher, co-executive editor of All Things Digital, who pushed the elite group of venture capitalists and investment bankers to talk about what they saw as the next big breakthrough.

Panelists commented on the incredible potential cropping up around human communication (think Facebook and Twitter), and the application of existing technologies to mundane industries (like Ocado, an online-only grocery delivery company). And that's what entrepreneurs do, said Eric McAfee, chairman of Cagan McAfee Capital Partners. They see opportunity and industry and "link the obvious to the obvious."

But overwhelmingly, sustainability is on their minds. To some, solar energy seems most promising; others think electrical efficiency or energy storage. But every panelist expressed interest in sustainable technologies because, as McAfee suggested, the projected costs associated with environmental problems (and the potential returns) are so astronomical that they have no choice but to deal with it now.

Ford Tamer, operating partner at Khosla Ventures, asserted that revolutions in these fields could help the United States reclaim its dominance as the technological giant of the world. Unfortunately, the "Google" hasn't shown up yet.

Or maybe it has, and they've overlooked it.

There's certainly a bit of retrospective revelation, admitted Steve Jurvetson, managing director at Draper Fisher Jurvetson, a firm that specializes in early-stage funding. He noted that many--if not most--venture capitalists once ridiculed the now-undeniably successful Google, eBay and Skype.

Swisher agreed, joking, "I've always thought venture capitalists were like high school girls."

Kauffman Foundation CEO: With Entrepreneurship, Less Government Is More

Also enlightening was Entrepreneurship=Recovery: A Formula for Long-Term Economic Growth, in which panelists reflected on the outlook for entrepreneurship in the United States, and if the recession was a good time to start a business.

On the latter subject, Carl Schramm, president and CEO of the entrepreneurship-focused Ewing Marion Kauffman Foundation, made several interesting remarks. Although there's no clear yes or no to the question, entrepreneurship tends to tick up during recessions. The more important point is that increased levels of business ownership make everyone better off. According to Schramm, more than half of the Fortune 100 companies were created during bear markets or recessions, and firms that didn't exist before 1980--when entrepreneurship really began to flourish--contribute one-third of the country's current GDP.

Schramm is therefore very much against the bailout and the economic stimulus. "The New Deal didn't work," he declared. His suggestion: Instead of handing out billions to troubled carmarkers, why not give the money to Detroit--straight to bright, perhaps ex-employees of the Big Three--and step back to let entrepreneurs figure out how to innovate the auto industry. "Can you imagine what the geniuses of America could do?"

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