Cleantech IPOs Aren't Groupons: VC CEO

NEW YORK (TheStreet) -- The clean tech IPO market has picked up again, and VantagePoint Capital Partners is in the middle of the current wave of interest.

The investment firm, which has about $4.5 billion in committed capital according to its web site, backs biofuels company Solazyme(SZYM), which just completed its offering; and BrightSource Energy, a solar thermal company planning one of the more highly anticipated IPOs.

VantagePoint is also an investor in LED lighting company Huga Optotech, which has scheduled an IPO in Asia. TheStreet recently spoke with VantagePoint CEO Alan Salzman about IPO opportunities in the clean tech space.

Alan Salzman, CEO of VantagePoint Capital

Investors have been burned by volatile green energy plays in the past, but the man who helped take Tesla Motors(TSLA) public and sold Myspace to News Corp.(NWS) says there is nothing unique to in understanding what makes a company succeed or fail.

TheStreet: Solazyme debuted successfully in the bio-based fuel and products market, yet there's been a wide gap between companies having success on a small scale and taking that success to mass commercial production on a cost competitive basis. Why shouldn't investors be confident in these companies?

Salzman: [T]he current interest in clean tech IPOs has to do with the maturity level of these companies and the fact that these companies are making physical products, with an inventory supply chain and manufacturing facilities. We are now seeing the first wave of companies, most of which date back to the 2004-to-2006 period reaching sufficient maturity to go public, and we are just at the beginning.

TheStreet: Yet Solazyme, as an example, hasn't reached the state of broad adoption and successful commercial scaling of operations, so why should investors have confidence?

Salzman: In the case of Solazyme, it has big partners. They have a series of large companies partnering with them and endorsing what they are doing, from Chevron(CVX) to Dow Chemical(DOW), the U.S. Navy for jet fuels, and Unilever(UL).

This tells you that there is an end market that will need production in commercial quantities. Without those partnerships it would be a different proposition. Let's go back to when Tesla was going public. Tesla had partnerships with Daimler and Toyota. When you are making electric vehicles and have two of best car companies in the world partnering with you, it's a pretty good endorsement.