The impact of venture capital and private equity on the clean tech industry

Abstract

The goal of this thesis is two-fold. First, we will try to find out if the clean tech industry is a good choice for private equity, in that it generates attractive returns for investors. Second, we will try to assess whether or not private equity and venture capital have had a positive impact for the clean tech industry as a whole. We will first analyze the performance of clean tech private equity since the beginning of the 21st century. As we will see that it has underperformed other sectors such as high-tech or biotech, we will then try to identify the specific challenges that the clean tech industry poses to private equity investing. Finally, we will do our best to offer solutions to these challenges and highlight the opportunities offered exclusively by clean tech in order to re-galvanize private equity investment in that sector. Our conclusion will show that there exists a sweet spot for clean tech private equity investing, and that private equity did have a significant positive impact for the industry as a whole. We encourage private equity investors to continue to allocate capital to that industry under certain conditions, as we are on the verge of significant revolutions in the near to medium future.