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The six million dollar men

Silicon Valley plans to clean up by investing in green energy.

It took only a few months, however, for billions to be wiped off the value of these companies. Many of them disappeared overnight. Within a year, the Valley's once-buzzing cafés, restaurants and networking bars were empty. Many companies and individuals faced ruin, and Silicon Valley was transformed from a hive of entrepreneurial activity to a ghost town of empty office blocks and Internet has-beens.

Eight years on, though, the Valley is buzzing again. The people who funded the extraordinary success stories of the 1990s have taken on a bigger challenge. This time they want to save the planet.

Venture capitalists are falling over themselves to invest in green energy. In 2007, they invested $1.1 billion in clean energy technology, according to CleanTech Group. That's an increase of 94 percent over 2006, a rate of growth that's bringing back happy memories of the dot-com boom. Even the credit crunch has so far had little impact, according to a survey by businessgreen.com.

Silicon Valley venture capitalists aren't the first investors to wake up to the fact that an energy technology able to compete with coal or gas is going to clean up in more ways than one. But their mindset is different. By applying the techniques they perfected in the dot-com era for rapidly turning ideas into money, the Valley venture capitalists have the idea they'll be able to reach the ultimate goal—energy that's cheaper and cleaner than coal or gas—in just a few years.

In support of this ambitious, perhaps even arrogant, claim, these venture capitalists point out that they've done it before. Half a century ago, this part of California was a small farming community known for apricots, not Apples. Then in 1956, William Shockley, co-discoverer of the transistor, set up a company in Mountain View to commercialize the invention. The move triggered the birth of an entirely new industry based on the silicon chip, and spawned household names such as Intel and Hewlett-Packard.

Behind the scenes, an extraordinary support network emerged to help set up, finance and staff the new companies. The ideas and minds came from nearby universities such as Stanford and Berkeley, the administrative know-how from a web of legal and accounting firms and the money from venture capitalists—wealthy individuals prepared to stake money on high-risk start-up companies in exchange for shares. Silicon Valley became a melting pot of innovation, entrepreneurship and risk-taking unrivalled anywhere.

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