Written by Ucilia Wang
venture-capital world will likely see a sharp decline in investment dollars and smaller deals in the fourth quarter, as investors and startups figure out how to weather the sinking economy.
Boston-based VC Rob Day made that prediction on his
Cleantech Investing blog last Friday, at the end of a week that was marked by sharp declines of the
Dow Jones Industrial Average and solar stocks. The Dow had sunk for eight straight days by Friday, capping
the worst week ever in its 112-year history.
(FSLR - Get Report) stock lost 26 percent of its value last week. Shares of
Suntech Power Holdings
(STP) lost 28 percent of their value, while
(ESLR) lost 25 percent.
With no visible end to the financial market crisis, VCs will likely prefer early stage greentech companies, which won't have to worry about exits through acquisitions or initial public offerings any time soon, Day wrote.
"So I think (guess?) Q4 will see a moderate decline in the number of cleantech deals overall, a bit of a shift into earlier-stage investing, and a big decline in aggregate dollar amounts," he wrote. "And early stage will be the first to pick back up going forward. Early stage cleantech venture capital remains a very attractive investment area."
Day also predicted "big-name cleantech startups
implode" during the downturn. Companies that have raised a lot of money to support fast expansion plans -- and that expected to raise more large sums in the near future -- will suffer, he said. (Don't miss "
Balance Sheets Matter Now More Than Ever
On that note, here is some recent funding news.
(ASTI - Get Report) is getting $15 million from Norsk Hydro
Over-the-counter ticker: NHYDY
, an aluminum company whose stake in Ascent Solar will rise to 35 percent. Littleton, Colo.-based Ascent Solar develops copper-indium-gallium-diselenide solar cells using plastic substrates. Last month, the company said it will begin supplying Spanish roofing firm Texsa with thin films that will be integrated into Texsa's products.