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Venture Capitalists Oppose California’s Prop 23

Gina-Marie Cheeseman
| Friday October 15th, 2010 | 7 Comments

While the biggest financial backers of California ballot initiative Proposition 23 are Texas oil companies, venture capitalists are among the big donors to its opposition. As of Monday, October 11, the opponents of Proposition 23 are spending more than supporters. Opponents of Proposition 23 raised $16.3 million to the supporters’ $8.9 million. The opposition has received almost $7 million in the last few weeks. The New York Times reported that, according to campaign finance records, opponents received major donations from Silicon Valley venture capitalists. One example is John Doerr and his wife Ann who gave $2 million.

Venture capitalists have heavily invested in California’s clean tech sector. According to data from the National Venture Capital Association (NVCA), there are 12,000 companies and 125,000 jobs in clean tech in California. Venture capitalists invested $9 billion in California’s clean tech sector from 2005 to 2009. During the first half of 2010, California attracted 40 percent of global clean tech venture capital, totaling over $11.6 billion, according to a study by Next 10. Clean tech manufacturing employment increased by 19 percent from 1995 to 2008, but total manufacturing employment decreased by four percent.

Emily Mendell, the NVCA’s vice president of communications, says, “Venture capital investment in clean technology start-ups in California are indeed supported heavily by AB 32.” Mendell adds, “If AB 32 is repealed, the California clean tech economy, which has been the root of jobs and innovation for the last several years, will be placed in jeopardy. We have publicly opposed Proposition 23 for just that reason.”

“The venture capitalists that brought us Google and Apple are now investing in the new clean energy economy because the companies are seeing returns on investment,” says Terry Tamminen, Gov. Arnold Schwarzenegger’s former chief policy advisor.

The Legislative Analyst’s Office (LAO) says that AB 32 would “discourage or delay investment and job creation in the energy efficiency and clean energy sectors, resulting in less economic activity in certain sectors than would otherwise be the case.”

Jim Watson, CEO of the venture capital firm CMEA Ventures, says that venture capitalists invest in California because “it has laws that favor clean tech.” According to Watson, California is five years into two decades of clean tech growth. AB 32 is essential for that growth. “It’s critical to have government support to develop those business­es in the early years,” he says.


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  • Tom Tanton

    …but all the start ups are starting up OUTSIDE California.

    • http://www.gina-mariecheeseman.com Gina-Marie Cheeseman

      Actually there are plenty of clean tech start ups in California. According to a study by Next 10, during the first half of this year, California attracted 40 percent of GLOBAL clean tech venture capital. (You can read the report at http://www.next10.org/next10/pdf/GII/Next10_GII_2010.pdf) The report also says that California leads the nation in clean tech patents, and more businesses start up in the state than leave or close.

  • http://www.facebook.com/leonkaye Leon Kaye

    I have to step in and say that is NOT true. Plenty of start ups in California exist from San Diego to Silicon Valley. Please avoid the blanket statements like “all the start ups are starting up OUTSIDE California,” which are completely misleading.

  • Earl Richards

    The California Jobs Initiative is a “pain in the neck.” There is no connection, whatsoever, between greenhouse gas emission reduction and the loss of jobs. This notion is an insult to the intelligence of the people of California. In fact, there is job growth in the clean, renewable energy industry. Chevron employs 65,000 worldwide and CJI is not going to change this. The only jobs created by the oil industry are clean-up jobs after oil spills and deep water, blow-outs and pump-handle jobs. CJI will make fantastic profits for the oil industry, increase air pollution, especially in communities around their refineries and there will not be lower gas prices. Koch Industries, Valero and Tesoro are super Enrons. Since when did the oil companies start to show any concern for the unemployed and their families and for small businesses? Exxon Mobil, Shell, BP, Chevron and Occidental are silent partners in CJI.

    • http://www.gina-mariecheeseman.com Gina-Marie Cheeseman

      Here, here! Well put!!!!

  • http://www.facebook.com/profile.php?id=1155551944 Ron Kilmartin

    The idea of green jobs is based on a myth. They cannot last for long. The myth is well recognized outside the green community. Folks should take their head out of the sand. See my essay: “AB 32 – some myths and some truths” at http://ronkilmartin.wordpress.com.

  • Wayne

    Yet another propaganda piece. I call it propaganda because you are not covering both sides here. The job and economic numbers fall HEAVILY AGAINST AB 32.

    The “green jobs, which include the trash man and bicycle shop employers, among other “stretch” jobs, as well as the investment and revenue numbers, are but a fraction of what we will lose if AB 32 is implemented.

    The key thing to keep in mind is that, according to CARB, the organization who wrote and will enforce AB32, AB 32 will do NOTHING to help global warming, will cost jobs and have a negative effect on the economy. This comes from the very people who drew it up!

    AB 32 does nothing for local pollution.

    Prop 23 leaves us with the toughest pollution laws in the country, among the toughest in the world. It will NOT increase local pollution

    If Proposition 23 is rejected, here is what will happen according to expert sources:

    •A 60 percent increase in your electricity bill according to the Southern California Public Power Authority.

    •An 8 percent increase in your natural gas bill according to CARB’s economic analysis.

    •$50,000 more for the price of a new home according to an analysis by the National Renewable Energy Laboratory.

    •$3.7 billion a year more for gasoline and diesel according to Sierra Research.

    •A $1,000-$3,000 additional cost for a new car according to CARB and automaker studies.

    On top of all that, a study conducted for the California Small Business Roundtable found that AB 32 regulations would cost small business alone nearly $200 billion, and would result in more than 1 million lost jobs.

    The more I learn about AB 32, the more I fear it. It just gets worse. Please vote yes on Prop23.

    “”2 Guys on the Bay Area Transportation Board told the CARB people, “If you try to do what you are going to do(AB 32) we’ll have gas at $9.07 a gallon and we have freeway tolls at up to $4,500 a year to drive during rush hour.”

    “Part of the plan is to stop suburban development, get people to stop driving, make driving too expensive for people to live out there, force them to live in high-rises, condos, in the city.”

    For months, John and Ken have made Prop 23 their top priority, calling it a necessary step to stop a law they say will kill jobs and cost Californians a fortune in higher gas and energy prices. With an estimated one million listeners per week, these two guys usually manage to rally enough votes to get their way.

    The video has John and Ken explaining why they think this bill is the most important measure on the ballot.

    http://www.cnbc.com/id/39853750