INVESTING IN CHINA: NEW ENERGY CAN BE BIG MONEY

A Light Bulb Goes on, and China Starts Thinking ‘Alternative Energy’
Matt Richtel, January 19, 2007 (NY Times)
- …Seed investors are financing, or considering financing, start-ups in China that are developing equipment for wind and solar power, clean water and food alternatives and technology to promote energy efficiency…there is a growing number of investors who believe that the potential reward in China is worth the tremendous risk.

- China has voracious energy needs and “the most serious environmental problem in the world,” said Jerry Li, a consultant in Beijing who matches venture capitalists with entrepreneurs. “There is a huge demand for investment” in alternative solutions, he said.
Mr. Li is the first director of Cleantech China, a joint venture beginning this month between Tsinghua University in Beijing and the Cleantech Venture Network, a blossoming North American trade and research group for venture capitalists investing in alternative energy technology…
- From June 2005 to June 2006, American venture capitalists put $100 million into China-based start-ups focused on alternative energy, double the investment in the period a year earlier…

- But the challenges are immense…China has a hard-driving, fossil-fuel-centered economy that has so far done little to diminish its reliance on those fuels.
- And venture capitalists have still not entirely figured out how to manage investments from such a distance, and across cultures, and, pointedly, how to get their money out once they’ve built the start-ups into viable companies…
- Mr. Li said that within six months, he expected to have a database of some 300 Chinese start-ups seeking investment partners…
- Mr. Li said the big challenge facing American venture capitalists is not so much finding viable technology as it is finding capable managers…