VC investments in energy: Insights from PwC's Tracy Lefteroff

Editor's note: This is an excerpt from an AOL Energy interview with Tracy Lefteroff, Global Managing Partner of PwC's venture capital practice based in San Jose, California. Click here to read the entire interview.

By Felicity Carus

AOL Energy

Q: What is the state of the venture capital industry, particularly in the energy sector, at the start of 2012?

Venture capitalists are cautious. They are investing in later stage, growth phases of development, at the expense of early stage investments. But what about some of the deals that don't get funded - the real question is at what cost?

If you're in social networking there's an abundance of capital chasing those deals. It is almost reminiscent of 1999-2000 on how some of these deals are getting bid up and entrepreneurs are being given one day to decide.

When you get outside of social networking all of the other industries are struggling to find liquidity, to get IPOs or M&As. That's slowing down the pace of investment and the appetite of VCs who are investing in those areas. We're starting to see a little bit of a trend, not a major trend of caution, that's entered the market. Clean tech quite frankly is one of those areas that is having a tough time.

Q: Which segments in the energy sector are seeing the most activity?

Canada is a hotbed for energy because of shale oil. There is so much activity and a lot of dollars going into shale oil right now. Calgary and Alberta are booming. Most of the VC-backed stuff there is services related, seismic and geological companies.

Read more about Canada's energy boom on AOL Energy here.

Q: Should a federal energy policy include a national price on carbon?

There's been so much controversy over whether the science has been conducted correctly, or whether it's people just asserting their personal opinions without data to support it. Al Gore didn't do the global warming debate any favoars by putting out a lot of data that was not scientifically correct [such as the Hockey stick graph].

It was like a commercial. They made such a big deal about it by making claims and throwing stuff out there that wasn't supportable. American people once they figure out this was a bunch of bull, it's very tough to get them back with the same mindset again. That's what happened with a lot of this global warming stuff.

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