Martin Kenney and Andrew Hargadon
- Published in print:
- 2013
- Published Online:
- May 2014
- ISBN:
- 9780804785259
- eISBN:
- 9780804788571
- Item type:
- chapter
- Publisher:
- Stanford University Press
- DOI:
- 10.11126/stanford/9780804785259.003.0004
- Subject:
- Business and Management, Innovation
In the last half century, venture capitalists have financed many of the most important new U.S. technology-based industries. This chapter poses the question of whether Clean Technology is an ...
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In the last half century, venture capitalists have financed many of the most important new U.S. technology-based industries. This chapter poses the question of whether Clean Technology is an industry, suggesting that this is not the case. After explaining the three key structural characteristics of technologies and markets in which venture capital can be successfully invested, it provides an overview of the diverse clean technology sectors to see if they match the characteristics. The structural success criteria are the following: First, the firm’s markets must be large and growing. Second, the firm’s solutions must be scalable, with the particular characteristic that growth in revenue (and valuation) must, after an initial hiatus, significantly outpace the capital needed to achieve it. Third, there must be the potential for large and rapid payoff for investors. To illustrate how these criteria apply to a particular clean technology marker, solar photovoltaic technologies are analyzed.Less
In the last half century, venture capitalists have financed many of the most important new U.S. technology-based industries. This chapter poses the question of whether Clean Technology is an industry, suggesting that this is not the case. After explaining the three key structural characteristics of technologies and markets in which venture capital can be successfully invested, it provides an overview of the diverse clean technology sectors to see if they match the characteristics. The structural success criteria are the following: First, the firm’s markets must be large and growing. Second, the firm’s solutions must be scalable, with the particular characteristic that growth in revenue (and valuation) must, after an initial hiatus, significantly outpace the capital needed to achieve it. Third, there must be the potential for large and rapid payoff for investors. To illustrate how these criteria apply to a particular clean technology marker, solar photovoltaic technologies are analyzed.
