well beyond nanotechnology. He explained that Lux closed its second venture fund at $100 million in January. About a third of Lux Ventures II has been invested so far in 12 companies that are developing innovations mostly in the life sciences and physical science, especially in energy, communications, and semiconductors.
“We have a contrarian view on energy,” said Wolfe, who contends nuclear energy is badly needed and under-utilized. “One area where we’ve focused involves one of the biggest problems we have to solve, which is the treatment or remediation of nuclear waste.”
Wolfe says the wave of venture interest in cleantech and renewable energy investments gives him “pause.” He views investing in algae-based energy startups as a step in the wrong direction because energy technology development has “always gone to denser and denser fuels.” To Wolfe, developing algae biofuels requires “going back to an agrarian economy… I think the jury is out whether the market will reward a biotech product that is basically a commodity.”
But Bock, who is a seed investor in San Diego biofuels developer Sapphire Energy, said he’s more optimistic. “I’m excited about it because they’ve very quickly gone from pure concept to actually doing it. They were flying commercial airliners on algae-based jet fuels in January.”
Finally, I asked Bock and Wolfe about the recent decline of venture capital investing, a nationwide trend that was acute in San Diego during the first three months of 2009.
“I think it’s safe to say that many VC firms are populated by senior partners who will say, ‘We created some great companies and made money for our limited partners, and now it’s time to retire,’ ” Wolfe said. He nevertheless says this is a great opportunity for venture investing, with markets low and a lot of expert talent now available that previously might have been too expensive to hire.
Bock agreed, saying, “I was most successful in biotechnology during the last nuclear winter in the early 1990s. I’ve seen this cycle in biotechnology several times during my career. I don’t think venture capital is dead and I don’t think the model is broken…In terms of early-stage investing in technologies coming out of universities, it’s like being a kid in a candy store.”
