Cathy Zoi made her first civilian appearance today.
Zoi, the former Acting Undersecretary for Energy and the Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy, left the government to join the George Soros-funded Silver Lake Kraftwerk private equity fund. She spoke today at the GigaOm GreenNet event in San Francisco, California, along with fellow fund director Adam Grosser, formerly of Foundation Capital.
It's the largest commitment to an outside vehicle from the Soros fortune.
Grosser led off by saying, "When we sat down, it was so apparent to us that there was an opportunity that was incredibly underserved." Grosser remarked that after $50 billion invested in greentech, some unwisely, it was time to anoint the winners and "provide growth capital to companies that are close to self-sustaining -- that need a slug of investment to reach their rightful stature."
Another enormous late stage fund was recently raised by VantagePoint Venture Partners.
Silver Lake Kraftwerk will be opening an office in Shanghai in parallel with their office on the San Francisco Peninsula.
In addition to Zoi and Grosser, the firm will be adding Raj Atlaru, recently of Draper Fisher Jurvetson, as well as Martin Fichtner, formerly of Silver Lake and Elevation.
Katie Fehrenbacher, the moderator of the session, asked, "What hasn't been working in greentech investing?"
"Most things," according to Grosser. "People got overenthusiastic." He added, "As much as we'd like to perform a terrific social benefit, we have a fiduciary responsibility, as well."
He added that there was "too much investment in science projects."
Zoi observed that the market won't pay an extra price for green, despite energy being "the invisible engine of economic growth" in this country.
And Grosser concluded that "we were naive about the regulatory environment." Many VCs were not aware of the "capricious and byzantine" nature of the regulatory environment.
Fehrenbacher asked the last question of the session about investments in smart grid. Grosser said, "Of course we're interested; the transformation of the grid is still nascent. We've been looking at an analytics company in Brazil, a sensor company in California and a software company out of Canada." Grosser said that there are holes still to be filled from the previous wave of investment -- the firm is looking at meter data management (MDM) and interfaces to legacy systems -- enhancing the quality of the information on the grid.
Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.
His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.
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