The high-rolling risk takers who brought you personal computing, the telecommunications revolution, the commercialization of the Internet, and, of course, Google now aim to do nothing less than save planet Earth—and make billions while doing it.
If the venture capital industry is successful, it might be the ultimate act of "angel investing," and perhaps no one is more emblematic of this new wave of high-minded technology entrepreneurship than Vinod Khosla, who, after a failed soy milk start-up in his native India, went on to become one of the driving forces of Silicon Valley as cofounder of Sun Microsystems and later as a venture capitalist. Khosla views climate change as the gravest threat the world has ever faced, and he knows others see America's foreign oil dependence as an urgent crisis. But in his calculus, we've been pitching pebbles at these Goliath problems. "Building a biofuels plant here and a solar plant there is not enough," he says, "unless we can replace 50 percent and hopefully 100 percent of the fossil energy sources."
This grand goal is not remotely in sight, even with wind and solar energy and ethanol growing at a breakneck clip. These renewables now provide just 3.6 percent of the nation's energy, and the government predicts their share will grow to a grand total of 4.2 percent by 2030. By those calculations, it sure looks like a fossil fuel future for America.
But Khosla, through his own Khosla Ventures and often working alongside the legendary VC firm Kleiner Perkins Caufield & Byers, where he maintains an affiliation, is in the vanguard of entrepreneurs and financiers who believe their Silicon Valley success stories can be repeated in green energy. They are pouring money and ideas into a new generation of alternatives to fossil fuel—"technologies that scale," in their words. That is, options that can ramp up to serve a large share of the nation's energy needs because they'll cost less than coal or oil. One estimate is that venture capital funds nearly tripled their investment on green energy last year, putting $2.4 billion to work....MUCH MORE