Home Depot is terrible at selling LED light bulbs. Amazon is even worse.

Have you had the experience yet of trying to buy LED bulbs at one of these places, realizing once you try the product at home that you hate: a) how it looks, b) how it fits; c) the light quality; or d) all of the above? And then you have to go through the trouble to take it or send it back for a refund. When you're paying $30 per bulb and making a 20-year purchase, these things kind of matter.

I don't blame Home Depot or Amazon -- they're not really designed to be the places where people discover which new products are up to PAR (sorry, bad pun). But if they're not the answer, what is? Lighting...

At Canaccord Genuity's very good sustainability dinner in Boston this week, I had an enjoyable conversation with CG's Marc Marano, a leader on their cleantech team.  He told me about some pretty interesting data they'd pulled together on the solar industry.

We're all familiar already with what a down year 2009 was for financings, but perhaps no sector was harder hit than solar panel manufacturers.  Marc's team had pulled together a list of all the financings in the solar sector for the five quarters Q1 2009 through Q1 2010.  And looking over their tally, I see 18 follow-on rounds during that period to solar panel manufacturers or their suppliers.

Twelve of those rounds were insider...

As an active investor in the cleantech market I'm definitely hoping we can start to see some successful exits.  I, like others, am pining for a few successful IPOs with stellar returns that can be good beacons of hope for the rest of the sector's bets.  When there were practically zero venture-backed IPOs across all sectors, you knew there was a backlog of cleantech companies that were lining up to IPO and couldn't.  And of course now that the IPO window is re-opened slightly, it's not surprising to see venture-backed cleantech startups jumping in and filing to go public.

But why are THESE the ones that are doing so?  A123, Codexis, Tesla, Amyris, PetroAlgae, Gevo... Several with no...

One thing that non-VCs typically don't have a good understanding of is how different venture investors view the risk versus reward tradeoff when it comes to managing portfolio companies.

How do VCs get compensated, besides salary?  "Carry", a/k/a profit-sharing.  And except in very few cases, carry on an entire fund, not on a per-deal basis.  Everyone in the industry is familiar with the studies that have shown that fund performance is typically determined, at least on the upside, by a handful of deals across an entire portfolio.  In other words, 1 or more really big wins drive all the performance.  And, by the way, 1 or more really big wins really drive a VC's career as well, because...

Happy tax day, everyone. 

Silicon Valley Bank put out a must-read study yesterday, examining returns from more than 850 VC funds in the U.S., looking specifically at returns by fund size.  And what they found out was that smaller funds do better than larger (>$250M) funds.

This won't be a surprise to some limited partners out there that I speak with, in my current dual role as both an LP and direct investor.  These LPs see smaller funds as being more focused and hungry.  As the SVB report states:

"Managers of [small] funds often have industry-specific expertise and focus on particular strategies or sectors compared to those of larger funds which usually target multiple stages and...

"My job is to look for entrepreneurs who want to change the world," one young cleantech VC told me in an engaging twitter conversation last night, "and build bigger companies."

Very true words!  But how do we define "bigger companies"?

I've seen someone mention that only two percent of startups get their financing from venture capital.  I don't know the accuracy of that number, but it does ring directionally true.  That doesn't mean 98% of startups are bad businesses, however.

Let me describe two basic types of startups:

1. The big game-changing startup that is going to be manufacturing or otherwise producing something very new.  They're going to need some significant level of capital...

We're going to look back upon 2010 as a time of major change in the cleantech venture industry.

I haven't heard yet of many established specialized cleantech venture firms scaling back, but it will happen, starting this year.  Certainly there have been a few of the more fledgling efforts to create new specialist firms that have floundered due to the bad fundraising environment over the past 18 months.  And now we're seeing scale-backs at generalist firms (such as Atlas Venture, and Polaris which PE Hub is reporting is raising $500M for their sixth fund, versus $1B for their last one).  As generalists shrink their funds, some are doing more cleantech, but many are going "back to their...