Results and discussion

The cleantech venture capital life cycle

The VC industry has experienced several booms and busts throughout its history. This pattern is of the form and character of a classical business cycle. The cycle whereby a new industry emerges with successful startups and good returns for VC funds to an industry with more funds being raised and bigger volumes leading to high competition for investments and high valuations and finally to the burst of the VC bubble. Despite its re-occurrence, industry and as well academia are often surprised each time the bubble bursts (Block & Sandner, 2009; Lerner, 2002; Mason, 2009). This pattern has appeared with changing amplitude in several countries, industries and investment stages (Lerner, 2002). The cyclicality and high volatility of the general VC market as well as the cleantech VC market can be observed in Figure 3. The Dotcom boom and crash of the late 1990s and early 2000s was an exceptionally high peak. The total VC market grew from $ 2.3 billion in the first quarter of 1995 to a peak of $ 43.7 billion in the second quarter 2000 just to drop to $ 9.1 billion less than three years later (Q1/2003).

— Venture capital investments - total and cleantech from 1995 to 2013

Figure 3 — Venture capital investments - total and cleantech from 1995 to 2013

The global media attention is aligned to the deals and investments as its pattern mirrors investment deals and it is highly correlated with the investments (see Table 2). While our data are not structured to inform us whether media or VC drives the conversation, it is clear that VC backed deals bring awareness of new technologies to mainstream media. This indicates that this media data can be used as a proxy for VC investment patterns.

All Article

All Deal

All Invest

CT Article

CT Deal

CT Invest

All Article All Deal All Invest CT Article CT Deal

  • 1
  • 0,78104389
  • 0,6699168
  • -0,14846649
  • -0,29431883
  • 1
  • 0,91317293
  • 0,30272177
  • 0,24240478
  • 1
  • 0,35815285
  • 0,31221119
  • 1
  • 0,89394843

1

CT Invest

-0,24197175

0,18057498

0,3423279

0,68266914

0,78225744

1

Table 2 — Correlation of VC general and CT — articles vs. investments

Figures 4 and 5 show the progression of total deals in the VC industry relative to the development of the total articles published on VC in the international newspapers, and the cleantech deals relative to the cleantech articles published in international newspapers. These charts suggest that media give less attention to VCs, except for when a new technology is being backed.

— Total venture capital articles and deals from 1995 to 2011

Figure 4 — Total venture capital articles and deals from 1995 to 2011

— Cleantech venture capital articles and deals from 1995 to 2011

Figure 5 — Cleantech venture capital articles and deals from 1995 to 2011

From these general patterns of media on VC, we drill down further to understand the pattern of investments being made within the cleantech sector. Figure 6 displays the results of the quantitative content analysis. Applying the cleantech dictionary to the media database[1], we see that media attention differed across quarters and/or years, permitting us to determine the relative importance of various technologies in different time periods, which we have organized into life cycle stages.

— Dictionary application — sector importance in venture capital articles

Figure 6 — Dictionary application — sector importance in venture capital articles

  • [1] The “Air” theme as part of the taxonomy has proved to include too many articles not properlyfitting the categorization so this theme has been left out for the analysis.
 
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