As the nation's energy crunch persists and the U.S. government continues to struggle
to come up with a time frame for reduced emissions,
venture capitalists are doing
their part by supporting new businesses “going green.”
What does going “green” mean?
In modern terms, “green” is not just a color. It is an environmental way of life
in which an individual or groups of people have a commitment to utilize resources
that are beneficial for the planet. Air, water, and food are just some of the necessary
components that will sustain life; therefore, keeping the environment clean is crucial
for maintaining health and existence. Many businesses are encouraged to properly
report their environmental liabilities to
potential investors. At the same time, they are also taking advantage of
A “green” business
A lot of new businesses are taking progressive steps to become more environmentally
efficient. For example, eco-friendly foods, clothing, and technology are just some popular inventions that new businesses have recently adapted. In addition, employees
are encouraged to use energy-efficient equipment and supplies and recycle appropriately
in order to help minimize the amount of carbon emissions and waste production. Eco-friendly
employers (eco-employers) have also been known to purchase bikes for their workers
to help combat the rising fuel costs. Becoming environmentally conscious, or “green,”
has become a very common practice in today’s business world.
Money in green
new business owners are finding it easier to gain access to capital if
they have a green component in their businesses. Federal agencies, environmental
organizations, and everyday consumers are demanding that businesses become more
environmentally aware and produce products that also have a green component. Therefore,
plenty of new businesses are doing just that. They are adjusting their business
proposals so their companies reflect a more environmentally sustainable economy.
Research shows that investment in new
business ventures that use green technology rose by 35 percent in 2005 to
total $1.6 billion. The investments in this sector are expected to grow by 10 percent
or more every year for the next few years. Another report indicates that most of
the "clean companies" attracting venture capital still hail from the energy industry.
More than 35.6 percent of the total money invested in
new business ventures were
in companies specializing in green materials and nanotechnology used in industrial
and consumer electronics.
New business ventures that are clean are also attracting
investments from banks. In fact, capital access from banks for these new
business ventures has also increased by more than 2 percent. Entrepreneurs looking
for seed capital from banks and other investment agencies need to keep their business
proposals ready. These proposals should clearly and succinctly state the mission
new business as well as its long and short term goals.
More and more entrepreneurs are adapting to “green” business practices and reflecting
these ideas in their business plans. Many
investors realize that going “green” is
a lucrative trend and are taking advantage of investing in these companies. Likewise,
banks also understand the importance of environmentally friendly business practices.
They also tend to favor companies with a green component.