Here's a not-atypical venture capital story:

An early-revenue (or sometimes even pre-revenue) stage venture-backed startup with promising early results wants to make a big splash and run really quickly, so they look to raise a large-ish "growth round".  

To identify a significant new lead investor for the round, they turn to investment bankers with their deeper rolodexes.  The i-bankers only take the assignment because the round will be big enough to provide large enough placement fees to justify their doing the work, versus some other larger transactions they could be working on instead.  For this reason, very few sub-$10 million venture capital rounds get big-named investment bankers placing them.

The i-bankers want to go to the types of large institutional investors in their rolodexes who typically cannot do direct investments into venture capital rounds, because of their check size requirement and other factors. Sovereign wealth funds, "growth equity" funds, pension funds, hedge funds, certain family offices, perhaps an aggregation of individual investors into a special-purpose vehicle, etc.  The i-bankers thus argue for an even bigger round, because then they can potentially bring in these very large check-writers who need to individually write (for example) a minimum of a $20 million check in order to get interested in any direct investment opportunity.  They also usually talk up the company as the best thing since sliced bread, naturally.

Now the round starts to look much larger than the company really needs at that particular point in time.  But that's okay to management and early investors because with these larger check-writers often comes a higher valuation.  If the round size doubled, it wouldn't be surprising to see the ultimate valuation also double, so that dilution for insiders remains roughly the same.  It's not justified that way overtly, of course.  But the existing investors and i-bankers and entrepreneurs all push for this outcome ("no way are we giving up more than x% of the company!"), and the outside larger investors mentioned above often aren't subject matter experts or well-positioned to do a lot of independent valuations and risk assessments of venture-stage companies. And of course, a company with such high growth aspirations must therefore have tremendous exit potential.  The valuation justification follows.  Sometimes the valuation is even established by the i-bankers instead of those actually writing the new checks.  Sometimes it's just that more bidders means a higher winning bid.

Either way, such a high valuation means investors' expectations are sky-high for the company's near-term growth and exit execution.  And they have the additional capital to deploy, so it's time to spend it toward acceleration.  Cash burn goes up.  And yet, not everything can be accelerated by simply spending more money.  Something along the way -- a technical challenge, a scale-up delay, slower-than-expected market adoption, a slammed-shut IPO window -- causes the startup to fail to hit their milestones even with the additional capital deployed.  Suddenly this high-profile company needs more cash, and is in a higher cash-burn situation with a weakened or "sidewise" story to tell.

Time to call in the i-bankers again.  And to start gathering as much non-dilutive government support as possible.  And to push a PR campaign.  And maybe to file an early IPO, as a financing event even if not a liquidity event.

Some such startups work through it. Others don't and flame out quite publicly.  Either way it certainly represents a potential negative selection bias in terms of which companies get the headlines, the big financing rounds, etc.  

This isn't a "good vs. bad" argument, I'm not suggesting that capital intensity never generates returns or is inherently evil, I'm not trying to invalidate i-bankers' roles or certain investment strategies; there's some good justification for a select few companies getting the above-described treatment. Certainly there are some great companies who get attention, government support, high valuations, etc, deservedly.  But there are also many who don't deserve it, as well as great companies who don't get this high profile treatment and its resultant press attention.  Some investors seem to drive their companies into this type of "hype-capital cycle" as a matter of course.

This cycle is what I believe people are implying was "Cleantech v1.0" when they talk about "Cleantech v2.0", as many are these days.  Nevertheless, I have yet to see any consistent definition out there of what Cleantech v2.0 means, other than "not Cleantech v1.0".

But understand -- the "hype-capital cycle" is a venture capital phenomenon.  It is not a cleantech phenomenon.  It happens in any number of venture sectors, to varying degrees.  

In the cleantech sector is where some of the more obvious examples of this cycle have occurred, especially a few years back.  But that should not in any way be used to argue that venture capital investments in the cleantech sector must necessarily look like any version of the above.  If the sector looks skewed toward capital intensity, in large part it's because the financial model applied to the sector has been skewed toward capital intensity, not because of some inherent underlying factor applying universally across the sector.

Cleantech is not capital intensive.  Some cleantech is capital intensive, but not all of it is.  Don't judge the entire sector by the fact that the above type of venture capital story gathered lots of headlines and dollars over the past few years, there are other stories to tell.  And in fact, "small cleantech" may ultimately get much bigger and provide better investor returns than any of the above story.  In other words, it may turn out that "Cleantech v2.0" actually looks a lot like "Venture Capital v1.0"... 

It's encouraging to see so many investors and industry participants actively seeking to develop a model for Cleantech v2.0.  But to date, it's mostly been defined by what it is not, than what it will be.