Adam Dudley's Profile

In the clean technology arena, VCs are getting choosier. Venture investments in cleantech companies soared 54% in 2008, to $4.1 billion, providing a bright spot in the chilly venture market. The sector is also benefiting from provisions of the government's stimulus package aimed at promoting construction of energy-efficient buildings and electrical grids, development of batteries for electric cars, and other green technologies.

Investors are realizing that startups cultivating alternative energy sources like solar, wind, and biofuel power consume lots of cash, face powerful competitors, and need to deal with government regulations. "There's so much that they can't control," says Paul Deninger, vice-chairman at investment bank Jefferies (JEF). Now VCs are turning to startups with more modest goals, including reducing the energy used by lights, buildings, and computer networks, he says.