If you're a cleantech entrepreneur whose company will need more capital over the next 12 months, you have to be worried. Cleantech remains out of favor among many LPs, VC itself remains out of favor, and most cleantech VC firms are running out of money. Confirming some of this, Dow Jones reported today that while VC firm fundraising was up 19% in terms of dollars closed in the first half of the year, actual fund closings were down 38%.  

Meanwhile, even the Cleantech Group couldn't muster up the enthusiasm to report Q2 as anything other than a down quarter. And in my opinion, if you look at the charts in their very handy press-pack presentation, you have to conclude that cleantech has been a sector pretty much in the doldrums for the past year and a half.  

These numbers would suggest that, if you can't raise money from one of a dozen or so generalist VC firms, you might as well stop trying.  And most of that dozen or so firms aren't doing much cleantech investing any more.

False.

I can only speak anecdotally, but I'm seeing three trends this summer that are making me optimistic that the second half of the year will be better for cleantech entrepreneurs that are seeking funding.

First, I'm seeing a lot of stronger companies and teams seeking to close on funding in Q3. This can be read either way -- certainly, the need for capital doesn't equate to the raising of capital. But from what I can tell, many of these companies have been able to get traction among funders. It's not a comprehensive data set, but I think good companies are still getting attention from a wide range of funders, not just those who raised funds earlier this year.

Second, corporates have never been more active in cleantech markets. The LPs may be sitting on their hands and wallets, but I've never had more productive and educational meetings with corporate venture or strategic managers who have been tasked with getting serious about cleantech markets than I have in recent months, via venture-type activities or otherwise. I'm even seeing a return of the "entrepreneurial electric utility" as a meme, albeit with the appropriate caveats and such. All of which means that many cleantech startups are indeed able to get customers to finance their product development efforts. And that is a very good thing, even better than deploying expensive venture capital dollars.

Third, I'm seeing more cleantech-specific VCs getting back into the market with some seriousness, instead of just taking meetings. Perhaps it's a false dawn, but enough cleantech specialist funds are getting LP traction that they're starting to think about the first few deals they'll do after a first close.  

You put these three trends together and it feels better than the numbers might indicate. I'm not a Pollyanna about this -- it remains tough out there for many cleantech startups seeking funding. But barring a second macroeconomic collapse, I think the second half will look better than the first half of the year in terms of dollars and deals in cleantech venture capital.